The federal government is phasing out paper checks for Social Security benefits and other federal payments beginning this month. The directive was issued through an executive order signed by President Donald Trump on March 25, to be followed by electronic payment systems for nearly all federal disbursements by September 30.According to data from the Treasury Department, paper checks are “16 times more likely” to be lost, stolen, or altered than electronic transfers. Officials claim the costs of maintaining paper-based infrastructure are unsustainable, reaching more than $657 million in Fiscal Year 2024 alone.Washington believes the change could help the cause of its biggest agendas, reducing fraud and wasteful government spending. US government mandates federal departments to use electronic paymentsUnder the order, the Treasury Department will stop issuing paper checks for federal disbursements, including Social Security, Veterans Administration benefits, vendor payments, intragovernmental transfers, and tax refunds. In July, the Treasury Department began notifying beneficiaries about the September 30 deadline, including details on alternative payment options. Officials said the administration is also using mass emails, social media campaigns, and updated call-center scripts to inform more people about the change that is just a fortnight away.All executive agencies are directed to switch to electronic funds transfer methods like direct deposit, prepaid card accounts, and other digital systems. Several cabinet-level departments, including Treasury, State, Veterans Affairs, Homeland Security, Education, and Health and Human Services, have been tasked with implementing the changes.“State departments are trying to eliminate paper-based processes wherever possible,” a Treasury spokesperson said. The Labor Department’s calculations show that issuing a paper check costs about 50 cents, much on the high end compared to less than 15 cents for an electronic transfer.Beneficiaries could still receive paper checksThe US Congress had voted to remove paper checks in the 1990s, although tax refunds were excluded from the requirement. Fast forward to today, about 94% of refunds, roughly 81 million of 86 million payments, were sent electronically during the 2025 filing season. Agency officials say fewer than 1% of beneficiaries with the Social Security Administration, Railroad Retirement Board, or Defense Department still receive paper checks. A spokesperson said that “where a beneficiary has no other means to receive payment, we will continue to issue paper checks.”The Veterans Administration has embraced electronic payments, with more than 97% of benefit disbursements now digital, according to VA press secretary Pete Kasperowicz. Federal law, however, still requires the agency to provide paper checks upon request to veterans who prefer them.Beneficiaries already on electronic payment systems do not need to take any action. However, those still receiving paper checks are encouraged to sign up for direct deposit through their payment agency, at GoDirect.gov, or by calling the Treasury’s electronic payment center at 800-967-6857. The US Treasury is asking those who are unbanked to open accounts through FDIC’s GetBanked program or MyCreditUnion.gov, or signing up for a Treasury-sponsored prepaid debit card.Recipients who continue to receive paper checks are required to self-certify that they face specific hardships. Advocates say these individuals are often lower-income, lack identification, or do not meet credit requirements needed to open a bank account. “Maybe they don’t have enough money to do an initial deposit or they don’t have reliable transportation to get them to the bank to get things set up,” said Kathleen Romig, a former Social Security Administration official.The executive order gave exceptions to the elderly, beneficiaries living in remote areas, and those with cognitive impairments and special needs. These groups may qualify for waivers, and the government will provide alternative payment options. Get $50 free to trade crypto when you sign up to Bybit now