Paper checks impose unnecessary costs and are subject to more fraud, the president says. Another order centralizes the payment of treasures.
President Donald Trump signed the March 25 executive order, calling on the Treasury to use electronic payments instead of paper checks, and a step aimed at reducing waste and fraud.
White House secretary Will Scharf pointed out some of the drawbacks of paper checking. “Historically, I think checks issued by the Treasury are 14 times more likely to be subject to fraud than electronic transfer payments,” he said.
According to the order, the Treasury Secretary must suspend issuance of paper checks by September 30, except in cases of “individuals who have no access to banking services or electronic payment systems” and “specific emergency payments in which electronic spending causes excessive difficulty.”
All enforcement departments and agencies will switch to electronic methods such as “direct deposits, debit/credit card payments, digital wallets, real-time transfers.”
Trump expressed confidence in Scott Bescent, the new Treasury secretary, adding that he wants to modernize the methods and equipment, and that there will be more upgrades along the way.
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“It should have been done 25 or 30 years ago,” President Trump said.
The second executive order, signed Tuesday, also appears to eliminate non-US payment offices and centralize the government payment process for the Treasury itself.
“Instead of many different departments, agencies and offices often issue payments without justification, they will often be as central to the payment process as possible without the rationale provided,” Scharf said.
In 2024, the order said it paid more than $181 million in total, totaling more than $1.5 trillion.
“This fragmentation of payment authorities, along with the spread of non-standard financial management systems across the federal government, leads to expensive, abandoned and overlapping financial reporting, lack of financial traceability, complex financial management, opacity, increased operational risk, and a declining ability of the Treasury to provide central surveillance.
The consolidation will be carried out by the Secretary of the Treasury and Director of the Office of Management and Budget, Russell Vert. The order directs the Treasury “within 30 days” to evaluate payment institutions delegated to the agency and issue a notice of expiration if necessary.
