The expression “the check is in the mail” is becoming outdated—at least regarding federal government transactions.
Recently, President Donald Trump signed an executive order mandating that the federal government cease payments through paper checks, which include Social Security benefits, tax refunds, and payment to vendors.
Starting September 30, all departments and agencies “must shift to modern electronic funds transfer methods like direct deposit, debit/credit card payments, digital wallets, and real-time transfers,” as stated in the order.
According to Social Security, approximately 480,000 individuals currently receive their monthly benefits through paper checks, accounting for around 7% of all recipients. Furthermore, nearly 4% of tax refunds issued this year were made via paper checks, as per the latest figures from the Internal Revenue Service.
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Individuals receiving checks from the government will need to establish an online bank account or a digital payment method, although there will be limited exceptions for those without access to banking or electronic payment options.
Payments made to the government for fees, loans, fines, and taxes will also be required to be conducted electronically.
What prompted the change?
The order outlines multiple reasons for eliminating paper checks, including unnecessary expenses, delays, fraud risks, lost payments, and theft. There has been a notable rise in mail theft complaints since 2020, and it was noted that Treasury checks are 16 times more prone to being reported lost, stolen, or undeliverable.
The order highlighted that in 2020 alone, banks reported around 680,000 instances of check fraud, nearly doubling the figures from 2021.
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