Trump orders phaseout of paper checks
Move aims to reduce fraud, theft, other issues
By: Nushrat Rahman
Detroit Free Press
USA Today Network
DETROIT - The federal government is phasing out paper checks in favor of electronic payments this fall, [2025] and financial experts both welcomed and cautioned the move.
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The shift could have :serious unintended consequences" for people who rely on paper checks, Jasmine Carson, executive director of empowerment and int gratin for Michigan's Wayne Metropolitan community Action Agency, said in a statement.
..... Individuals receive paper checks in the mail for their tax returns and benefits such as Supplemental Security Income, she said. And people without back accounts may struggle to transition, delaying payments.
..... But Matt Hetherwick, chief program officer at the Accounting Aid Society, said the transition is a way to safeguard American taxpayers; dollars. His agency has, for years, encouraging direct deposit for refunds because paper checks are not as reliable or efficient, hes aid.
..... The change takes effect September 30, [2025] according to a March [2025] executive order from President Donald Trump that directs the secretary of the Treasury to "cease issuing paper checks for all Federal disbursements inclusive of intergovernmental payments, befits payments, vendor payments, and tax refunds," with exceptions, including people who don't have access to banking services and national security or law enforcement activities.
..... All executive departments and agencies must transition to direct deposit, prepaid cards and other digital payment methods.
..... The president directed the change because, according to the order, paper checks and money orders impose "unnecessary costs; delays; and risk of fraud, lost payments, theft, and inefficiencies."
.... The vast majority of people rely on direct deposit for their tax refunds and Social Security benefits. But there are individuals who still prefer paper checks, and they may encounter some challenges, experts said.
..... The Wayne Metropolitan Community action Agency offers free financial counseling for locals thorough the Financial empowerment Center. The center's clients could face unintended consequences, Carson warned. Wayne Metro will be doing outreach explain the change and helping people transition to electronic options.
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"Many individuals in our network who rely on paper checks face barriers to digital banking, whether due to limited technology access, lack of trust in financial institutions, or not ahivng a bank account at all," Carson said. "For clients receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI)m a sudden transition to direct deposit could lead to decrease to essential income. Our goal is to serve and this transition could cause additional ones."
..... Seniors may also struggle.
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"Many are not familiar with mobile banking apps or digital wallets, and concerns about fraud or identity theft can make them hesitant to switch,:" she said. "If a debit cards to their benefits is lost or stolen, it may take time to get a replacement, which delays access to funds and potentially delays bill payments."
..... Carson said there's growing momentum toward electronic patents for Social Security beneficiaries. Across the country, 477,731 people get Social security check payments as opposed to direct deposit, accounting for 0.7% of total payments from the Social Security Administration, according to government data from May. [2025]
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The Social Security Administration's website direct people to receive befits electronically either through an existing bank account or onto a District Express or Debit Mastercard, citing federal law mandating that befits be made electronically.
..... Hetherwick of the Accounting aid Society, which helps low-income residents in southeast Michigan with tax preparation, welcomed the move away from paper checks.
..... "There's alway going g to be a subset of our community that this will be challenging for. There's absolutely no doubt about that. But overall, it is a benefit to protect the refund getting to the people they're supposed to get to, and in a timely manner and in an efficient manner,"Hetherwick said.
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Paper checks can get lost and people move, he said. And once a person gets a paper check, they must cash it out, and if they didn't have a bank account they may incurs fees to get their money.
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"This is allowing them to keep every dollar of the refund in their pocket and not ahivng to give it to somebody else just so they can access the money that's due to them," Hehtwerwick said.
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For those who can adjust to the transition, Carson said the move aways from paper checks could help people avoid late fees with auto bill pay, give 24/7 access to their balance and provide FDIC insurance to protect money, among other benefits.
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But people who aren't tech savvy may struggle to sue Online banking, apps or websites, she said. Others may not trust financial institutions.
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"Client must update their banking information for direct deposit, which can be confusing or difficult," Carson said. "This transition can cause payment delays, especially if they have bills due immediately and late payments can impact their credit scores. Wait ling for a digital physical card can take seven to 10 business days. these delays could stall critical income for weeks or months."