In a sweeping move to modernize the federal government’s payment infrastructure, President Donald Trump signed an executive order on Tuesday mandating a government-wide shift from paper-based payments to electronic alternatives. The change, which takes effect September 30, will impact all federal disbursements and receipts—from tax refunds to vendor payments—pushing them onto digital rails such as direct deposit, debit cards, digital wallets, and real-time transfers.
The White House framed the order as a cost-cutting, fraud-fighting measure designed to eliminate outdated systems and bring “America’s bank account” into the 21st century.
“We’re doing this, and we have other modernization programs going on… these are steps that should have taken place decades ago,” said Trump during the announcement at the White House.
Why the Push to Go Digital?
According to the Treasury Department, over 98% of government payments already go out electronically. But stubborn pockets of paper-based disbursements—particularly checks—still persist across certain agencies and demographics. Trump’s executive order aims to close those gaps permanently.
The rationale is simple: paper-based systems are slow, expensive, and prone to fraud. Data from the Financial Crimes Enforcement Network (FinCEN) shows that mail-theft-related check fraud alone topped $688 million in just six months last year. Once stolen, checks are commonly altered, counterfeited, or fraudulently endorsed.
Digitizing payments is both a security upgrade and an operational one. A report from PYMNTS Intelligence and Ingo Payments suggests that organizations using real-time or instant payments enjoy faster cash flow, reduced overheads, and improved vendor relationships.
What the Order Changes
- Federal Disbursements: By the end of September, all benefits, tax refunds, interagency payments, and vendor invoices must be paid electronically “to the extent permissible by law.”
- Payments to the Government: Fees, fines, taxes, and loans must also be made electronically wherever possible.
- Lockbox Services: Agencies are directed to wind down the Treasury’s physical lockbox operations in favor of digital collections.
- Exemptions: The EO carves out allowances for individuals without access to banking or in hardship situations, and for national security-related exceptions.
The Treasury Secretary is tasked with coordinating the transition and leading a public awareness campaign to ensure federal payment recipients understand how to switch to digital options.
DOGE’s Expanding Role and Centralization Push
This order doesn’t come in isolation. It follows a series of digitization efforts tied to the Department of Government Efficiency (DOGE), the Musk-affiliated task force that has gained access to Treasury systems under Trump’s second term. While controversial—drawing lawsuits over privacy concerns—DOGE’s growing influence has accelerated payment reforms across agencies.
The latest executive order also centralizes control, handing the Treasury Department full authority over federal payment processing. The goal: unify fragmented systems, improve auditability, and reduce opportunities for misappropriation.
Treasury Yields and the Layoffs Question
As digital transformation takes center stage, so too does cost control. Treasury Secretary Scott Bessent has been openly targeting lower bond yields to curb borrowing costs, a goal supported by scaling back expensive legacy processes. But a separate, related development is drawing scrutiny: planned layoffs across Treasury bureaus.
Court filings confirm that the department is preparing job cuts under the DOGE directive, focusing on recently reinstated employees and those with probationary tenure. While the Treasury hasn’t disclosed exact figures, the move underscores the administration’s broader agenda—streamline operations and modernize fast.
The Bigger Picture
America’s fiscal plumbing, much of which was built decades ago, is getting a long-overdue overhaul. Centralizing payment systems under Treasury control and phasing out paper are the first visible signs of a deeper transformation.
Whether it’s improved fraud detection, faster refunds, or better oversight of taxpayer money, the shift to a digital-first Treasury could reshape how the federal government handles its most fundamental task: moving money.