A new study released by the National Electronic Payments Association (NACHA) posits that employers are the key to increasing awareness and adoption of direct deposit. 64% of direct deposit users are encouraged or required to use the it by their employer, while 37 percent of non-users are not given the option to do so by their employer.
WHAT CAN YOU DO?
As a payroll professional, you hold the key to providing your employees with the peace of mind and ease of use that are associated with direct deposit. Aside from simply offering direct deposit as a payroll option, you can also be a direct deposit advocate and educator.
MISCONCEPTIONS ABOUT DIRECT DEPOSIT:
Some of your employees may not be aware of the benefits of direct deposit, especially employees who are young or low-wage workers who have never used direct deposit before. They may think that they don’t qualify, that signing up for direct deposit is a bigger hassle than cashing a check every payday, or that they have to maintain a bank account balance in order to receive direct deposit. You can help dispel these misconceptions.
DOES IT HELP YOU?
In addition to helping your employees, encouraging direct deposit is in your best interest. Increased adoption of direct deposit means less time spent processing, tracking, printing and managing paper checks, as well as money saved on check printing costs for your company.
HOW TO INCREASE DIRECT DEPOSIT PARTICIPATION:
Use our state payroll laws guide to find out if your state has any restrictions on requiring direct deposit.
Update your payroll policy to require or strongly encourage direct deposit.
Partner with a paycard company. Paycards allow any employees to receive access to pay through direct deposit—even those who don’t qualify for traditional bank accounts.
Ask employees who are not already enrolled in direct deposit to bring in their bank account information or sign up for a paycard.
Integrate direct deposit enrollment into the new hire orientation process.