Government to End Paper Check Disbursement for Federal Payments

July 3, 2025

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An Executive Order issued on March 25, 2025, mandates that the U.S. Treasury no longer issue paper checks for federal disbursements—including tax refunds, Social Security benefits and vendor payments—as of September 30, 2025. The federal government will transition to making electronic payments instead.

Who is impacted?

The three main groups impacted are:

1. Social Security and other federal benefit recipients: This includes anyone currently receiving Social Security or veterans benefits. The Social Security Administration estimates that 69 million Americans receive an average of $1,700 in monthly benefits.
2. Taxpayers receiving their refunds by check: Those who receive IRS tax refunds by check are estimated to be 2/3 of Americans, with an average amount of just over $3,000.
3. Government contractors: This includes businesses or individuals who are paid by the federal government for any contracts or grants.

The mandate is intended to prevent fraud and reduce cost. U.S. Treasury checks are 16 times more likely to be reported lost or stolen, returned deliverable or altered than electronic payments. Estimates show that discontinuing the use of paper checks could result in annual savings of $750 million.

While the Executive Order urges federal agencies to transition incoming payments to electronic methods, it does not establish a firm end date for accepting paper checks from businesses or individuals. Agencies are instructed to move inbound payments to digital ‘as soon as practicable’ under existing law.

What You Need to Do

Proactive transition to alternative payment methods can enhance efficiency, lower costs, and safeguard cash flow. More importantly, the transition to digital payments offers greater security through encryption and authentication, greatly reducing the risk of theft or alteration of paper checks.

Individuals receiving federal payments

• Sign up for direct deposit or other electronic payment method: If you receive payments by check, provide a bank account for direct deposit or enroll in an approved prepaid debit card program to access benefit payments without a bank account. You can do both online or call the Treasury Electronic Payment Solution Contact Center at 877-874-6347.

Businesses sending or receiving federal government payments

• Enroll in electronic funds transfer systems: If your business receives federal payments via paper check, enroll through U.S. Treasury systems like sam.gov or asap.gov. If you're already enrolled, ensure your account information is accurate in order to avoid delayed payments. If you make payments by check to the federal government, shift to electronic payment channels instead.
• Communicate with your finance teams: Alert your internal teams to the impending change so they can update systems and shift to reconciling payments electronically.

With an increased focus on mobile banking and commercial customer experience, New Tripoli Bank continues to expand its suite of digital cash management offerings that are designed to provide a convenient and secure commercial client experience. This includes electronic/digital payables and receivables solutions such as ACH, remote deposit capture, cards, and digital checks. In addition to offering fraud detection and protection tools, the Bank works closely with clients to help them optimize workflows, reduce payment costs, and mitigate risk during this transition.

Contact New Tripoli Bank or call Michael Koch, Business Development Manager, at (484) 224-3742 to learn more about our commercial digital banking options.

Beware of Potential Scams

As with any change affecting large groups of people, there is a potential for misinformation and scams. You should remain vigilant when you encounter any links to websites or receive emails from individuals offering to assist you with transitioning to electronic payment methods.

You should always contact your financial institution directly in order to set up direct deposit or other electronic payment methods. Financial institutions will never contact you directly asking for your account information.

In addition, avoid anyone who asks for money in exchange for helping you to set up direct deposit or electronic payments. Most financial institutions do not charge a fee to set up these services for their customers.

If you have been the victim of fraud or have been contacted by someone attempting to scam you, alert your financial institution and file a fraud report at https://reportfraud.ftc.gov/

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