Government payments are going digital

The U.S. government is phasing out paper checks for federal payments, signaling a major shift toward electronic funds transfers and real-time digital solutions.

This modernization effort, driven by a 2025 presidential executive order titled “Modernizing Payments To and From America’s Bank Account,” aims to create a payment ecosystem that is secure, efficient and inclusive.

The end of paper checks

Paper checks have long been associated with increased fraud, delays and high administrative costs. The mandate is expected to improve operational efficiency and increase the safety of transactions to and from federal agencies.

The benefits of moving to electronic payments include:

• Accelerated disbursements: Real-time payments for benefits, refunds and emergency aid mean money quickly arrives where it’s needed.
• Reduced fraud: Digital transactions are less vulnerable to theft and forgery. According to a 2024 report from the Financial Crimes Enforcement Network, mail theft-related check fraud amounted to more than $688 million over a six-month analysis period. Department of the Treasury checks are 16 times more likely to be lost, stolen or altered than electronic funds transfers.
• Lower costs and inefficiencies: Digital payments result in lower processing and mailing expenses, reducing manual processes, waste and errors.

The mandate’s deadline to eliminate paper checks was Sept. 30, 2025. It made electronic payments the default option. Limited exceptions will be made for certain situations and other qualifying cases, and the measure includes efforts to expand access to unbanked and underbanked populations – like issuing prepaid cards and supporting the use of mobile wallets.

Modernizing the federal government’s payment systems is not just about replacing paper checks with digital equivalents; it is a catalyst for growth and innovation. It provides a unique opportunity to leverage the ongoing digital payment innovations that will benefit how Americans pay and get paid. The mandate will help modernize government payments for a population that already has largely embraced the security and convenience of digital payments and electronic funds transfers (EFT) in other areas of their lives.

Worldpay’s blueprint for a smooth transition

As a global leader in payments processing, and a trusted payments partner of the federal government for more than 20 years, Worldpay brings unmatched experience to this modernization effort. To deliver the best outcomes for Americans, the government should prioritize consumer choice, interoperability and security. Here’s how it could be done:

• Expand payment choices: Offer ACH transfers, push-to-card payouts and digital wallets to ensure inclusivity, including for the unbanked and underbanked.
• Prioritize security and trust: Work with the private sector to implement advanced fraud prevention, strong encryption and multifactor authentication to safeguard every electronic transaction. Worldpay has pioneered real-time fraud monitoring and digital identity verification to build confidence.
• Launch a national education campaign: Provide multilingual guides, local assistance and proactive outreach – online, in-person and via direct mail – to ensure every recipient understands and adopts electronic options.
• Collaborate across sectors: Use partnerships with payment processors, community organizations and financial institutions for rapid, effective adoption and support. Worldpay supports an industry-government fraud and risk exchange to share best practices.

The success of this effort depends on public-private collaboration. Worldpay’s proven infrastructure and compliance expertise can help the federal government implement these changes quickly and securely.

Fit for the future

Modernizing government payments isn’t just about efficiency – it’s about equity, trust and innovation. By phasing out paper checks and embracing digital solutions, the government is creating a system that works for everyone. Worldpay is sharing its expertise with the federal government in this transformation, bringing proven technology and decades of experience to ensure a more seamless, secure and inclusive transition.

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