What you need to know about SSA’s transition to electronic payments

Paper checks from the federal government are largely on their way out. Beginning Sept. 30, 2025, the U.S. Department of the Treasury will stop issuing most paper checks, including Social Security and veterans’ benefits, tax refunds, vendor payments and other federal disbursements. The shift to electronic payments has been years in the making, but now the deadline is firm.

Why this change is happening

Executive Order 14247, Modernizing Payments To and From America’s Bank Account, the government cites security, efficiency and cost as the main drivers. Paper checks are 16 times more likely to be lost or stolen than electronic payments. They’re also slower to process, which creates delays when people depend on timely deposits. For the Treasury, each paper check costs about 50 cents to issue compared with less than 15 cents for a direct deposit. Multiply that by millions of payments yearly, and the savings to the government become clear.

What SS beneficiaries need to know

Direct deposit puts money directly into a checking or savings account, eliminating the wait for the mail and the risk of a lost check. For those without a bank account, the Treasury offers the secure Direct Express® prepaid debit card, which can be used like any other debit card at locations such as ATMs, grocery stores and retail stores. Social Security beneficiaries who cannot access electronic payment systems, face emergency payment hardships or have other special circumstances may qualify for exceptions and be provided alternative payment methods.

What vendors must do

Vendors doing business with the federal government will also be affected. To ensure receipt of the electronic payments, they must verify their banking information is accurate and current in SAM.gov, the government’s central registration system. Failing to update this information could result in delayed payments after the transition date.

What the SSA is doing to help

The Social Security Administration (SSA) is focusing heavily on the beneficiaries who still receive paper checks. While this percentage is very small, the SSA wants to make sure no one falls through the cracks. The agency is sending notices and check inserts to those affected, explaining the steps needed to switch to electronic payments. Beneficiaries can log in to their my Social Security account to update their payment method or contact the SSA directly for help. The Treasury is also offering resources through GoDirect.gov along with its Electronic Payment Solution Center which can be reached by phone (1-800-967-6857).

The benefits of electronic payments

For people who have been reluctant to switch to electronic payments, concerns often revolve around technology and trust. Some beneficiaries worry about navigating online systems or not having a bank account. Others feel safer holding a physical check in hand. However, electronic deposits are traceable, protected by banking safeguards and replaceable if compromised. With paper checks, recovery from theft or fraud can be more difficult.

The Direct Express® card is particularly designed for people who do not have traditional bank accounts. It requires no credit check, carries no monthly fees and ensures benefits are available on time every month. For many unbanked beneficiaries, it is the most straightforward way to continue receiving payments without interruption.

Staying aware of scams

This transition also comes with warnings about potential scams. As with any major government initiative, fraudsters may try to take advantage of confusion by impersonating agencies or requesting personal information. The Treasury and SSA stress that beneficiaries should only provide banking details through official channels like GoDirect.gov, SSA.gov or verified phone numbers. They will never call or email to demand sensitive information. Staying vigilant is a critical part of this change.

How tax pros can help transition their clients

Pros can remind clients during tax season that paper checks will no longer be issued and point them toward secure resources. This is also an opportunity to discuss the benefits of having a checking or savings account. Since refunds and credits will be issued electronically, guiding clients through this transition will reduce stress and ensure they receive funds without delays.