An EO From the Trump administration mandates the government to modernize payments–but may not move the needle much
In late March, the Trump administration placed a rush order on a nominally major reshuffle to a government system pumping more than $5 trillion across the country. The White House’s executive order titled “Modernizing Payments To and From America’s Bank Account” rhymes with DOGE-y refrains against “fraud, waste, and abuse” and instructs, effective September 30, 2025, the Secretary of the Treasury to discontinue issuing checks for any Federal disbursements. That includes “intragovernmental payments, benefits payments, vendor payments, and tax refunds,” the encyclical explains.
The order tells the Secretary of the Treasury to support agencies during a transition to digitized payments by “providing access through the Department of the Treasury’s centralized payment systems” to direct deposits, debit and credit card payments, digital wallets, and real-time payment systems, and “other modern electronic payment options.” It also outlines exemptions to the executive order’s ban on checks, including “individuals who do not have access to banking services or electronic payment systems,” as well as national security- or law enforcement-related uses for checks.
According to Jennifer Tescher, Founder and Chief Executive Officer of the Financial Health Network, the executive order doesn’t expand the role of electronic payments in government affairs by that much. “The Electronic Funds Transfer Act of 1999 required that all government payments other than tax refunds be made electronically starting January 1, 1999 — so the only difference here is the addition of tax refunds,” Tescher said.
But industry responses to a request for information about the executive order from the Department of the Treasury suggests industry groups, advocacy orgs, and payments cos all see an opportunity for recalibration under this new EO — for better or worse — not merely an expansion of digitized tools into tax refunds.
Perhaps tellingly, stablecoin issuers like Ripple and Circle submitted responses to the Treasury’s RFI. Circle said it believes “that well-regulated payment stablecoins can play a pivotal role in expanding financial access and creating more transparent and secure means of disbursement of vital public services.”
Adam Rust, Director of Financial Services at the Consumer Federation of America, said the Federation is concerned that the executive order may be a “stablecoin play,” which raises questions around risk mitigation, consumer privacy benefits, and regulatory frameworks for non-fiat payment systems. “If it’s a privately issued stablecoin, can you imagine the interest on deposits that creates an opportunity to receive? That’s a mammoth giveaway to somebody,” he said.
Incumbent industry groups touted the thrust of the executive order and pivoted away from stablecoin questions. The Independent Community Bankers of America (ICBA) — which has historically played a key role in shaping banking and financial regulation — stated explicitly in its RFI comment that “Treasury should focus on existing, widely used, and safe payment mechanisms.” Scott Anchin, the ICBA’s SVP of Strategic Initiatives and Policy, told Fintech Nexus he didn’t see the executive order as “an effort to push forward stablecoins.”
The ICBA had interacted with lawmakers over the past two years to highlight upticks in reported check fraud and to flag the need for policy intervention, Anchin noted. “I’m not surprised, really, to see this come out,” he said.
The industry group’s RFI response highlighted another key concern and constituency: the people who rely on physical checks, and who may need to adapt to new digital systems if they’re not exempted from the EO. The ICBA foregrounded its capacity through member community banks to assist outreach efforts and inform unbanked and underbanked populations of newer payment disbursement tools. It also encouraged the government to continue making check-based disbursements if it’s a “matter of necessity” for recipients.
Those dependent on checks can be politically marginalized or otherwise economically, socially, and/or infrastructurally disadvantaged. “The folks who are still receiving the largest share of checks are probably going to people who receive [supplemental security income],” said Tescher of the Financial Health Network, “and the disability community has a whole additional set of access challenges.”
In separate responses to the Treasury, the Kootenai Tribe of Idaho and Nez Perce Tribe both stated that the executive order may harm Tribal citizens if the exemptions to check disbursements are too narrow. A blanket transition to electronic-only payments “will impose real harm on Tribal members who lack access to reliable banking services, face limited internet and broadband infrastructure … and [are] not positioned to quickly adapt to digital financial systems,” wrote Jennifer Porter, Chairwoman of the Kootenai Tribe of Idaho. Both tribes’ comments advocated for slower implementation timelines, meaningful government-to-government consultation, and expansion of tribal financial and broadband infrastructure.
For those with easier access to payments infrastructure, Tescher argued that the federal government has previously demonstrated its effective ability to disburse funds electronically through the Direct Express program. The system allows beneficiaries to receive government disbursements through a prepaid Mastercard debit card. “There’s a model for doing this that’s been quite successful,” she said.
Rust of the Consumer Federation of America framed current disbursement systems differently. Programs like Direct Express should contract with more than one provider — Comerica Bank historically ran Direct Express; though BNY is now taking over — which can enable competitiveness in terms of cost as well as customer experience. He attributed some problems within the current system to the “take it or leave it proposition” that government contracts for digitizing benefits disbursement presently entail.
What’s omitted or stated in passing within the executive order matters, too. The Financial Data and Technology Association (FDATA) of North America suggested that, ultimately, the executive order’s success depends upon the fate of open banking. The courtroom-drama section of this saga — a proxy battle between incumbent banks and fintechs over how data is stored, shared, and (un)monetized — may soon be over, as the CFPB this week filed a motion to stay in the case, claiming “the Bureau has now decided to initiate a new rulemaking to reconsider the Rule with a view to substantially revising it and providing a robust justification.” Now comes a renewed proxy battle as the substance and letter of revised open-banking rules are sorted out.
“Without a clear legal right for consumers to share their financial data, innovations like pay-by-bank can’t scale, and Treasury’s goals to reduce fraud, cut costs, and modernize payments will fall short,” Steve Boms, FDATA’s Executive Director, said in a written statement shared with Fintech Nexus.
That the EO exempts national-security and law-enforcement projects from non-digital payments may suggest the Trump administration is aware that over-digitizing poses systemic risks. Looking abroad, Sweden and Norway, which have the lowest amount of cash in circulation relative to their GDP, have separately encouraged citizens to store a week’s worth of cash in case electronic payment systems are targeted by foreign adversaries (namely Russia). “If no one pays with cash and no one accepts cash, cash will no longer be a real emergency solution once the crisis is upon us,” Emilie Mehl, a former Norwegian government official, told The Guardian.
The currency, reach, and security of “America’s Bank Account” hang in the balance.
