The Federal Paper Check Phase-Out: What Treasury Sources Say About Getting Paid Electronically by Government Customers

Businesses that sell to federal agencies have long been paid by a mix of electronic transfers and paper checks. Treasury sources now describe a government-wide move away from paper. This article summarizes what Executive Order 14247 and Treasury’s Bureau of the Fiscal Service say about the change, how it relates to vendor payments, and which questions are reasonable to ask a bank or payment provider about receiving federal payments. It is informational only.

What the executive order says

Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” was signed on March 25, 2025. Its stated purpose is to move federal disbursements and receipts to electronic payments, citing the “unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies” associated with paper. The order directs Treasury to cease issuing paper checks for all federal disbursements, a category it describes as including intragovernmental, benefit, vendor and tax refund payments, subject to the order’s exceptions and “to the extent permitted by law.” It also directs agencies to take the steps necessary to enroll recipients in electronic funds transfer (EFT) payments. The full text is in the Federal Register.

The order also covers money flowing the other way. It says payments to the federal government should be processed electronically as soon as practicable, and that agencies should work to eliminate the need for Treasury’s physical lockbox services for items such as fees, fines, loans and taxes.

The effective date and what Treasury announced

Treasury’s announcement and the Bureau of the Fiscal Service’s “Paper Checks Are Going Away” page state that, starting September 30, 2025, the federal government stops issuing paper checks for “most federal payments.” The Fiscal Service page cites a risk reason, stating that paper checks are “over 16 times more likely to get lost, stolen, altered, or delayed” than electronic payments. That is Treasury’s own comparison, and this article has not independently verified it. Treasury’s press release focuses mainly on benefit recipients and contains no specific guidance for businesses.

The wording “most” matters. Neither the announcement nor the Fiscal Service page lists specific exceptions, and the Fiscal Service page itself was last updated in February 2026, after the date had passed. Anyone relying on a particular payment type should confirm its current status with the paying agency.

Exceptions in the executive order

Section 4 of the order directs Treasury to revise its procedures to allow “limited exceptions where electronic payment and collection methods are not feasible.” The listed categories are:

• individuals without access to banking or electronic payment systems;
• certain emergency payments where electronic disbursement would cause undue hardship;
• national security or law enforcement activities; and
• other circumstances Treasury determines through regulations or guidance.

Treasury’s implementation resource page says check disbursement operations are now “focused on qualifying exceptions,” that agencies should continue following existing EFT waiver procedures, and that Treasury plans to revise 31 CFR Part 208. The order contains no separate exception for businesses.

What Fiscal Service says to vendors

The Fiscal Service page offers a short note for government vendors: update the SAM.gov registration with valid bank account information, and, if a bank account is already registered, work with the paying agency to make sure payments are issued electronically. The page lists a SAM.gov help desk number for questions.

The Fiscal Service’s vendor guidance adds several details:

• Federal vendors are to receive payments by direct deposit under the EFT rule, 31 CFR Part 208, and the page states that no waivers are available to vendors.
• Vendors enroll separately with each paying agency, using the ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881), which collects the financial institution’s account and routing numbers.
• On request, a financial institution must provide payment-related information by the opening of the second business day after the payment posts. Fees for this service vary by institution.

The separate electronic vendor payments page says the Fiscal Service prefers to pay vendors by EFT, that invoices lacking a taxpayer identification number and electronic payment details are sent back, that payments follow the Prompt Payment Act, and that payment remittance information is available through the Invoice Processing Platform (IPP).

What electronic delivery means in practice

For a business whose government customers formerly paid by check, the practical difference is that funds arrive by ACH credit into a bank account rather than as an item to be deposited. The executive order also lists other modern channels, including card payments, digital wallets and real-time payment systems, as options Treasury’s centralized systems are to support. Separately, a Fiscal Service announcement dated October 2, 2025 states that the FedNow Service is available for instant federal agency disbursements through Treasury’s Digital Payout program. Whether any given vendor payment will arrive that way is a question for the paying agency, since the sources reviewed here describe direct deposit as the vendor channel.

This shifts several routine tasks. Remittance detail, which used to arrive with a paper check stub, now comes through bank reports or the IPP. Reconciliation matches an incoming credit to open invoices rather than to a deposited check. For background on these topics, see our articles on ACH for B2B invoicing and FedNow and instant payments, and for the paper side, our piece on Check 21 and remote deposit capture.

Impersonation risk during a transition

Treasury’s materials warn about government impersonation scams and advise verifying any request by contacting the agency through a website or phone number already known to be genuine. That caution is relevant to vendors, because a request to “update banking details” is a familiar pattern in payment diversion. Our article on business email compromise and vendor-change controls describes the control practices finance teams commonly use for such requests.

Questions to ask

• Which of our government customers still pay by check, and has each confirmed an electronic payment method?
• Is the bank account listed in SAM.gov and on each agency’s enrollment form the one we intend to use, and who in our organization is authorized to change it?
• How will we receive remittance detail, through bank reports or the IPP, and does our bank charge for it?
• Can our bank match incoming government credits to invoices, and how are unmatched credits handled?
• If a payment is delayed or misdirected, which party do we contact first: the agency, our bank or the Fiscal Service?
• How does our team verify that a request to change payment instructions really comes from the agency?

Where a merchant account broker fits

Bridge Capital Partners helps businesses compare merchant account and payment processing options. For companies that accept both card and ACH payments, it is reasonable to ask a provider how incoming ACH credits are reported and reconciled, as described above. The government-payment rules themselves are set by Treasury and the paying agencies, not by processors.

Sources

• Federal Register, Executive Order 14247, Modernizing Payments To and From America’s Bank Account (checked 16 October 2026)
• U.S. Department of the Treasury, Treasury Announces Federal Government Will Phase Out Paper Checks on September 30th (checked 16 October 2026)
• Bureau of the Fiscal Service, Paper Checks Are Going Away (checked 16 October 2026)
• Bureau of the Fiscal Service, Avoid Delay: Options to Secure Your Payments (checked 16 October 2026)
• Treasury, Implementation of Executive Orders on America’s Bank Account (checked 16 October 2026)
• Bureau of the Fiscal Service, Direct Deposit Vendor Guidance (checked 16 October 2026)
• Bureau of the Fiscal Service, Electronic Vendor Payments (checked 16 October 2026)

This article is for general informational purposes only and is not financial, legal, or tax advice. Payment rules, agency procedures and bank practices change, so consult your bank, payment provider or a qualified professional about your specific situation.