The federal government will phase out paper checks on Sept. 30 for most federal payments, the Department of the Treasury said in an Aug. 14 statement.
“If you are one of the few people who still receive a federal benefit check, it’s time to switch to an electronic payment method,” the department said.
Americans can sign up for a direct deposit option through the federal agency that issues their payment, via GoDirect.gov, or by calling the Electronic Payment Solution Center at 800-967-6857.
“No action is required for the vast majority of Americans who already receive federal benefit payments electronically,” the Treasury said.
According to the GoDirect website, switching to direct deposit ensures quicker access to money while nullifying the issue of lost or stolen checks.
Americans signing up for direct deposit will be asked to submit their social security number, information from the most recent federal benefit check or claim number, savings or checking account number, and the routing transit number of their financial institution.
In its statement, the Treasury said that people who do not have a bank account can sign up for the Direct Express Debit Mastercard, a Treasury-sponsored debit card.
The Treasury encouraged Americans to switch to electronic payments, calling direct transfer a “safer, faster, more convenient” way of receiving benefits.
However, it also warned of government impersonation scams.
“Before responding to a request, check it out and verify it by contacting the agency using a website or phone number you know is real. If you’re unsure, ask a trusted source, like your bank, a friend, or family member, for help,” it said.
Treasury Secretary Scott Bessent said that reducing paper checks has been a “longstanding bipartisan goal.”
The Trump administration is finally putting the plan into action, he said.
“Thanks to President Trump, this will help reduce fraud and theft. It will also remove delays that prevent hardworking Americans from receiving their vital payments,” Bessent said.
According to Federal Reserve data, the central bank processed 36 million government checks last year, down from 40 million in 2023 and 46 million in 2022.
The agency processed 83 million government checks in 2020 and 131 million checks in 2021 during the pandemic period.
Modernizing Payments
The Treasury’s Aug. 14 statement follows a March 25 executive order signed by President Donald Trump seeking to modernize payment methods.
The continued use of paper-based payments by the federal government imposes unnecessary costs, delays, inefficiencies, and risks of fraud, according to the order.
“Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT),” it said.
“Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.”
The order instructed the phase-out of paper check disbursements and receipts by Sept. 30. However, it made exceptions for certain limited situations, such as for individuals who do not have access to banking services.
In a July 1 statement, policy group Better Markets said that while there are benefits to eliminating paper checks, it could also “severely harm” America’s vulnerable families.
Shayna Olesiuk, director of banking policy at the group, said the policy would require individuals to get approved for an exception in order to receive paper checks.
“There are many valid reasons that some Americans—including some of the most vulnerable in our society who do not have reliable internet access, who live in rural areas, and who do not have a bank account—cannot make or receive, or do not feel comfortable using, electronic payments,” Olesiuk said.
“Forcing an abrupt transition away from paper checks would be a grave, careless, and cruel decision. Instead, the Treasury should provide all Americans with detailed information on the exception process and extend the implementation date to allow appropriate time for all to understand how this change will affect the payments.”
Agencies are making adjustments to comply with Trump’s order. On July 14, the Social Security Administration (SSA) said it will “no longer issue paper checks for benefit payments.”
In a July 28 statement to The Epoch Times, an SSA spokesperson clarified that exemptions would be applied to certain beneficiaries.
“We will continue to drive down paper check volume, which is less than 1 percent of total, by proactively communicating with beneficiaries about the advantages of enrolling in electronic payments and the process for doing so,” the spokesperson said.
“Where a beneficiary has no other means to receive payment, we will continue to issue paper checks.”
According to SSA data, 521,644 beneficiaries received their social security benefits via checks as of July, a minor number compared to the more than 68 million people who got payments via direct deposit.
Jack Phillips contributed to this report.
