Federal Government Shifts to Mandatory Electronic Payments
In March 2025, President Trump signed Executive Order 14247, initiating a major transformation in the way the federal government handles payments. Beginning on September 30, 2025, all payments made by the federal government, including tax refunds, Social Security benefits, and vendor payments, must be issued through electronic methods. Similarly, payments made to the federal government, such as taxes, fees, and penalties, must be submitted electronically wherever current laws permit.
This directive is intended to increase the speed, security, and efficiency of federal transactions. Paper checks are more vulnerable to fraud, delays, and loss, and they also impose higher processing costs. By adopting electronic payment methods, the government expects to significantly reduce administrative expenses and improve reliability in the exchange of funds.
Although the policy applies to most transactions, specific exceptions will be allowed. Individuals who do not have access to banking services or electronic payment systems may still receive paper checks. Certain emergency-related payments and transactions related to national security or law enforcement may also be exempt from the electronic payment requirement.
For small and mid-sized businesses, especially those that provide goods or services to federal agencies or receive payments from government programs, this shift highlights the importance of maintaining updated financial infrastructure. Business owners should evaluate their current payment systems, confirm that they are compatible with electronic transfers, and ensure they are prepared to receive or remit payments electronically moving forward.
To help support this transition, federal agencies are expected to roll out educational materials and outreach campaigns. These efforts are designed to assist both individuals and organizations in navigating the shift away from paper-based payments. Nonetheless, the responsibility ultimately lies with businesses and taxpayers to prepare in advance and ensure their systems are in alignment with the new federal requirements.
This executive order marks a significant step toward modernization of the government’s financial operations. By replacing outdated, manual processes with secure and efficient digital solutions, the government aims to provide faster, more reliable service to all stakeholders involved.
For questions about how these changes might affect you or your businesses, please contact your ShindelRock team.