PHOENIX–A full 82% of U.S. workers ─ crossing age, income and other demographic categories ─ are paid by direct deposit via ACH, up from 74% in 2011.
Awareness is also strong, with 79% of consumers who do not use direct deposit via ACH reporting familiarity with the service, according to the results of a new survey conducted by Javelin Strategy & Research on behalf of NACHA—The Electronic Payments Association, and America Saves, a campaign managed by the Consumer Federation of America.
According to the survey, employees are highly satisfied with direct deposit via ACH (87%), which provides for the electronic deposit of payroll. They also believe it to be safe and secure (83% versus 52% of employees paid by check), that it helps them better control their finances (72% versus 54%), and that it helps them pay their bills on time (73% versus 46%).
The survey’s resulting white paper, “Beyond Simple and Safe: Opportunities to Expand the Use of Direct Deposit via ACH for Payroll,” also details the top reasons employees use direct deposit via ACH, including faster access to pay (53%), which is also cited as an advantage by younger Generation Y (60%) and part-time employees (51%); no cost (47%); and it eliminates the risk of losing a paper check (38%).
Yet even with the steady increase in direct deposit via ACH usage through the years, there is still room for more growth, according to NACHA. The 18% of employed U.S. consumers who are not paid by direct deposit via ACH can be readily identified within three key population segments: younger Generation Y (Gen Y.1 who are ages 18 to 24), lower-income workers (with household income under $50,000 per year), and part-time workers.
Of consumers who use or are aware of direct deposit via ACH, 21% indicate that they first learned of the option from their bank or credit union. Further, direct deposit via ACH users expressed higher satisfaction with their financial institutions where their pay is deposited than nonusers, awarding an average of nine out of 10 points.
Meanwhile, 64% of direct deposit via ACH users utilize the service because their employer encourages or requires it. Conversely, 37% of employees who do not use direct deposit report that their employers do not offer the option. Additionally, consumers paid by check, cash or other means have somewhat less satisfaction with their employers’ payroll options, giving them an average rating of six out of 10 points, according to NACHA.