What Are the Economic Impacts of the Federal Government Going All-Digital?
As the adoption of digital payment methods continues to increase, the long-held phrase “cash is king” isn’t as true as it once was. In fact, consumer usage of cash at point-of-sale (POS) locations in the United States dropped by 13% between 2018 and 2024 . And paper checks are also used less frequently: From 2000 to 2015, the number of checks written by U.S. consumers plummeted by 63%, from 19.3 billion to 7.1 billion . As of 2022, U.S. consumers wrote an average of just 15 checks per year .
Today, most checks are written by businesses or the government, according to data from the Atlanta Federal Reserve . And that’s about to change.
On March 25, the President signed an executive order mandating all federal departments and agencies end their use of paper checks for all disbursements and switch to electronic payments by September 30, 2025. This significant move aims to modernize how the government handles money, transitioning from outdated paper-based payments to fast, secure electronic payments. The potential economic benefits of this transition are substantial, with officials promising the transition will reduce costs, enhance efficiency and improve financial management across government operations.
Cost Savings
The shift from paper checks to electronic payments is expected to yield considerable cost savings for the federal government. Paper-based payments impose unnecessary costs and delays, and increase the likelihood of fraud, lost payments and theft. Processing payments through traditional methods can cost as much as $20 per transaction , compared to about 30 cents per digital transaction. By eliminating the need for paper checks, the government can significantly reduce administrative overhead and operational expenses. Additionally, automated workflows free up government staff for higher-value tasks, further contributing to cost savings.