The Trump administration is gradually modernizing the federal payment system, starting with the Social Security program.
In a mid-July announcement, the Social Security Administration (SSA) revealed it will stop issuing paper checks starting September 30th.
According to a blog post from the agency, electronic fund transfers (EFTs) will deliver payments to beneficiaries more quickly than paper checks. Interestingly, paper checks cost about 50 cents each to process, while EFTs cost under 15 cents. This shift aims to enhance security against fraud and save the government millions annually.
The SSA is looking to maximize the use of direct deposits or prepaid debit cards—called direct express cards—for as many beneficiaries as possible. However, they will still provide paper checks in limited situations.
Although most Social Security recipients have transitioned away from paper checks, the SSA is actively notifying anyone still receiving them about the upcoming changes and how to prepare.
Currently, fewer than 1% of beneficiaries receive paper checks, and the SSA is reaching out to these individuals to explain the new processes, including how to register for direct deposits or get speed cards.
When they made the announcement, the SSA mentioned they would contact those receiving paper checks in person and include inserts in benefit checks detailing the process for moving to electronic payments, with assistance from SSA technicians.
The decision to phase out paper checks also underscores security issues related to mailing checks to recipients.
The SSA highlighted that paper checks are 16 times more likely to be lost or stolen compared to electronic payments, increasing the risk of fraud. They emphasize that electronic payments are a safer and more secure option.
This push for electronic payments stems from an executive order signed by President Trump in March, underscoring federal policy aimed at promoting electronic transactions.
In July, the SSA encouraged beneficiaries to update their payment preferences anytime via their personal Social Security accounts.
Moreover, the agency has launched a web page offering information on how to register for direct deposits and obtain high-speed direct cards.
