A recent executive order from President Donald Trump that is set to go into effect in September will impact around half a million Social Security beneficiaries. Titled “Modernizing Payments To and From America’s Bank Account”, the executive order states that all federal payments will now have to be made digitally as it is a safer and more efficient method of conducting transactions and disbursements.
This means paper based payments forms will be phased out come fall later this year. Here is what you need to know.
Federal disbursements and payments go fully digital in the fall
Issued on March 25, the executive order from the office of the president stipulates that the use of paper based payment methods will be discontinued and as of September 30, 2025, it will be phased out. The reasoning behind this is that non-digital payment methods such as mailed checks pose an unnecessary risk for fraud, theft or other inefficiencies.
Additionally, the executive order states that, “Mail theft complaints have increased substantially since the COVID-19 pandemic. Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT).”
As such, the mandate stipulates that all federal payment methods will switched over to the following:
(i) direct deposits;
(ii) debit and credit card payments;
(iii) digital wallets and real-time payment systems; and
(iv) other modern electronic payment options.
This move towards complete digitization is the Trump Administration’s way of aiming to “modernize how the government handles money, switching from old-fashioned paper-based payments to fast, secure electronic payments,” as per the White House.
How will this impact Social Security?
For the most part, Social Security beneficiaries have already opted to have their monthly benefits transferred to them digitally. However, there still remains close to 500,000 beneficiaries who receive their monthly benefits in the form of paper checks mailed to them. Due to this executive order, these beneficiaries will have to switch over from paper checks to direct deposits or prepaid debit cards.
Whilst exceptions will be made for those with no access to banking systems, adjusting the accounts of these individuals who are able to transition to digital payment methods will undoubtedly add more pressure to the SSA which currently holds its lowest headcount in 50 years.
This change could also prove to be difficult to navigate for seniors who are not particularly familiar with modern technology or digital banking, and the same could be said of those who do not have access to reliable internet. As such, the executive order does state that exceptions and accommodations to the order will be made for the following individuals:
(i) individuals who do not have access to banking services or electronic payment systems;
(ii) certain emergency payments where electronic disbursement would cause undue hardship, as contemplated in 31 C.F.R. Part 208;
(iii) national security- or law enforcement-related activities where non-EFT transactions are necessary or desirable; and
(iv) other circumstances as determined by the Secretary of the Treasury, as reflected in regulations or other guidance.
“This abrupt shift away from paper Social Security checks will disproportionately harm seniors who lack digital access or confidence navigating online banking,” Matt Watkins, founder of Watkins Public Affairs, said to Newsweek. “The timing is especially troubling given that the Trump administration is simultaneously cutting National Telecommunications and Information Administration (NTIA) digital equity funding. These resources directly support seniors, low-income households, and others facing barriers to digital adoption.”
“This isn’t efficiency; it is exclusion. Without expanded navigator programs, multilingual outreach, and phased implementation, we will see a spike in missed payments, call center backlogs, and preventable financial crises for some of our most vulnerable citizens. Families can help, but not every senior has someone to rely on. This is a costly and avoidable policy failure,” Watkins added.