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Organizations representing the payments industry are coming out in support of the federal government’s move to eliminate paper checks for disbursements.
Nacha, the governing body that oversees the ACH network, The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association, have submitted comments to the Treasury Department in support of Executive Order 14247, Modernizing Payments To and From America’s Bank Account. The letters were submitted in response to the Treasury Department’s request for comments on the order, which was issued by the Trump Administration in March and calls for the elimination of paper checks for federal disbursements as of Sept. 20, 2025.
The executive order was issued with the intent of improving the efficiency of government payments to consumers and businesses and reducing “unnecessary costs,” fraud risks, and theft and lost payments associated with those payments by digitizing them.
“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),” the executive order says. “Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.”
In its letter to the Treasury Department, Nacha noted that the estimated cost for the federal government to cut and mail a paper check is $2.02, compared to 12 cents for an ACH credit. In 2024, The Treasury Department issued 36 million paper checks. Had those payments been sent via the ACH network, the government would have saved more than $68 million dollars, Nacha says.
Nacha also stressed in its letter that the transition away from paper checks by the federal government is more “a matter of policy choices” and implementation than “technical readiness.”
“Eliminating paper checks for government disbursements will enhance the efficiency, security, and cost-effectiveness of the U.S. payments system…as ACH payments cost significantly less than printing and mailing paper checks,” a Nacha spokesperson says by email. “Electronic payments also provide greater certainty and speed to recipients and reduce fraud risk.”
In their joint letter to the Treasury Department, The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association pointed out that digitizing government payments will help reduce the risk of fraud. Check fraud accounted for about 32% of all fraud losses in 2024, according to Federal Reserve data. Treasury checks are frequent targets for criminals because they are issued in high volumes, and regulations typically require that funds from Treasury checks be made available the day after deposit.
“Checks are the most exploited payment method for fraud across the broader financial ecosystem,” the Nacha spokesperson says. “According to the 2024 AFP Payments Fraud and Control Survey, checks continue to be the top fraud vector among payment types. By transitioning away from paper checks, the federal government can eliminate its most vulnerable payment channel, significantly reducing the potential for fraud and improper payments.”
In their respective letters, the four organizations present additional recommendations for securing and implementing digital government payments. Nacha recommends expanding account validation to mitigate fraud and reduce improper payments through such means as using multiple account-validation tools to confirm that recipients’ accounts are open and valid before initiating payments and using bank account information already on file, such as for Social Security payments, to issue other payments like tax refunds, reducing the need for checks.
Nacha also recommends leveraging existing banking information across federal agencies to streamline Direct Deposit enrollment and shortening the Treasury’s ACH credit-settlement times to bring them in line with standard ACH timing in the private sector.
The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association recommend launching a public-awareness campaign to educate consumers on the speed, simplicity, and security of electronic payments, expanding the government’s use of existing secure electronic payment platforms, such as The Clearing House’s ACH service and Early Warning Service’s disbursements with Zelle.
The groups also advise investing in fraud-detection and prevention tools, such as tokenization. “A token for a checking account, for example, can be used for a specific transaction or for a specific merchant, such as a recurring monthly bill payment,” a spokesperson for The Clearing House says by email. “If a fraudster obtains the token by hacking into company’s database, they can’t use it. Whereas, if a fraudster hacks into a database that has checking account information, the fraudster could use that information to commit fraud. Accounts can be tokenized on RTP or TCH’s EPN (ACH) networks.”
In its four-page letter to the Treasury Department, Zelle parent company Early Warning advised Treasury to issue public-awareness campaigns and to urge the unbanked population to look at opening a bank account, stressing speed, convenience, and security for funds transfers
Other fraud prevention tools include the use of identity verification capabilities, limiting exceptions to electronic payments, and continuing to work with banks to detect counterfeit or altered checks, according to the three organizations. The organizations also recommended that Treasury study government payment data to better understand why some consumers still rely on paper checks.
