Nacha has recently launched a campaign to increase direct deposit awareness and use for Millennials.
In recent years, direct deposit has been increasingly utilized by businesses and individuals as a convenient and secure way to transfer money. As technology evolves, so do the benefits of direct deposit.
In 2023, it is expected that the advantages of using direct deposit will become even more commonplace. It is predicted that companies will be able to provide their employees with greater convenience, security, and cost savings when they use direct deposit.
Direct Deposit & Millennials: The Latest from Nacha
In a recent study, Nacha found that 97% of workers between the ages of 22 and 34 have a bank or credit union account, with 83% receiving direct deposit paychecks. But there’s a caveat: this widespread use of direct deposit payments only applies to W-2 employees, where 82% of respondents use direct deposit.
When it comes to gig workers (one of the employment sectors experiencing lots of growth since 2020), only about 47% of these individuals are paid with direct deposit. This usage also increases as adults (right now Millennials and a small portion of Gen Z) progress in their life.
Those who make larger payments and have more monthly bills, like those who own their own homes, businesses, cars, and the like, are using ACH and direct deposit payments more often.
But why wait? Whether your personal or business dealings include people from younger or older generations, it’s helpful to know the benefits and capabilities of ACH and direct deposit as a means to improve business cash flow and personal financial wellness.
Benefits of Direct Deposits: Consistency and Trust
One of the biggest benefits of direct deposit payments that are powered by ACH transactions include the safety and trustworthiness of the system.
80% of those who participated in the survey above consider ACH highly trustworthy. The process is simple and the information you need to send or receive ACH payments is extremely minimal. Comparatively, every time someone uses a paper check, they are sharing nearly all of the personal or business account information needed to forge payments and commit other fraudulent payments.
Consistency is another significant factor. ACH and direct deposit payment numbers are growing every year, and there has been an increase in the thresholds (amounts you can send via ACH per transaction) and security that keeps direct deposit payments running smoothly.
And with more gig work, the consistency of payment is a huge benefit of utilizing direct deposit to collect payments, wages, and other reimbursements. Because gig workers, independent contractors, and small business owners are all running a business for themselves, the need to collect accurate payments increases.
And on the other side of that same coin, large corporations benefit from the speed and volume of deposits and withdrawals that can be done with the direct deposit system. No need to process hundreds or thousands of checks, money orders, or other time-consuming forms of payment.
Direct Deposit Is More than Just Paychecks
Many people hear “direct deposit” and think of bi-weekly paychecks showing up in your bank account from your 9-5 gig, but it’s so much more than that. You can use ACH and direct deposit for so much more.
This includes payments to vendors you do business with, mortgage payments, utilities, subscription services, donations, product purchases, and student loan payments – the possibilities are endless.
Because of the high security and ease of access, ACH payments create a lot of forward momentum for your personal and business accounts, which means you can leave behind the 4- to 7-day waiting period before your funds become available.
Cost Savings, Security, & Flexibility
ACH and direct deposit solutions (like those offered through ReliaFund’s secure payment processing platform) are much more cost-effective than paper checks and, in most cases, even credit and debit card transactions. There are no extra materials or fees needed to process hundreds and even thousands of payment requests through ACH.
Though many people list the security protocols that must be in place for secure ACH transactions as a disadvantage for this payment type, we see it as a benefit. Here’s why.
There is not a single thing that has been moving in a digital-first direction that hasn’t come under scrutiny or needed extra security measures to keep things from being hacked, stolen, and corrupted.
And when you can send hundreds of thousands of dollars via ACH, you certainly want as much security and protection as possible so your transactions safely reach the right people and accounts. Because of these added layers of safety, you can also reap the benefits from a customer service and partnership perspective – more people will want to do business with you when they know their funds are being transferred safely and accurately.
And though the safety protocols are more stringent, you don’t lose much in the way of flexibility. Direct deposit and ACH efforts are easy to customize. You can create recurring payments (monthly, quarterly, yearly), increase or decrease the amounts being sent or received, and you don’t have to worry about the location of your employees, customers, or vendors.
You can choose the solutions that work for your business and there’s no geographical limit. If your graphic designer lives in London, you can still pay them bi-weekly. Your commission payments for a traveling representative can easily be modified.
ACH and Direct Deposit: Key Pieces of the Digital Payments Puzzle
From direct deposit benefits to mobile check deposit technology, it’s time to reform your digital payments strategy and embrace a comprehensive payments platform.
With ReliaFund’s ACH processing (just one part of our custom payment processing platform), you can send and receive payments with a variety of the most powerful technologies aimed at making sure your accounts are balanced and your payments clear faster.
With just a bank routing number and a checking account number, you can set up recurring payments, collect monthly or one-time purchase fees, and run reports, reconciliation, and more.
Reach out to us today to start making your payments platform work for you, instead of the other way around.