FAQs ACH for Business
Questions about Direct Deposit
What if an employee does not have a bank account?
Many companies offer payroll cards to employees who do not have bank accounts and use Direct Deposit to fund the cards. Talk to your financial institution or payroll provider for more information.
How do employees know when their pay has been deposited?
Employees can view their Direct Deposit transactions on their online banking service and on monthly account statements. Additionally, financial institutions or payroll providers can provide electronic or paper-based options for reporting gross, deduction, and net amount details to your employees.
Can my company mandate the use of Direct Deposit for payroll?
Some states allow companies to mandate Direct Deposit of payroll. For more information, contact your state's labor department.
Do I need special software or technology to process Direct Deposit?
In most instances, you only need an internet connection. Your financial institution or payroll provider will provide what you need to start offering Direct Deposit. Most business software packages now include Direct Deposit as a standard feature.
Is it expensive to convert my company's current paper-based process to Direct Deposit?
No. In fact, most companies recoup Direct Deposit start-up costs in savings and increased productivity in the first year of use. Your company also should realize reductions in printing, postage and error resolution costs.
What is the risk of fraud with Direct Deposit?
Using Direct Deposit reduces the risk of fraud by eliminating the use of paper checks that could be altered or counterfeited. Unlike a paper check that bears your account number for all to see, when you use Direct Deposit your account number remains confidential to your financial institution or payroll provider. Make sure that the computer you use to initiate your Direct Deposit has the most recent versions of anti-virus and anti-malware software and all updates loaded, and avoid using that computer for personal emails, surfing the internet, and social networking. Talk to your financial institution or payroll provider to learn about additional sound business practices to protect sensitive data.
Is my company too small to offer Direct Deposit?
Direct Deposit is appropriate for a company of any size. Whether you have 1 or 100,000 employees, shareholders or retirees, Direct Deposit streamlines payment processing and saves time and money.
Questions about Direct Payment
Will it cost my company money to offer Direct Payment as a payment option?
As with any new service, there are initial set-up costs, as well as ongoing costs. These costs will seem small once your company begins to realize the savings of Direct Payment.
Is Direct Payment just for large companies?
Businesses of any size can benefit and offer Direct Payment. Customers increasingly expect to be able to pay bills by Direct Payment.
How will my customers know the date the payment will be withdrawn from their checking or savings account?
Your company is required to send a written notice seven days before the scheduled date. Many companies select a specific day of the month and remind customers that if that date falls on a weekend or holiday, payment will be collected on the first business day following.
How will my customers know the dollar amount that will be withdrawn from their checking or savings account?
If a customer signs up for recurring Direct Payment and the amount is fixed, that is specified in the enrollment process. If the amount varies, such as for a utility bill, you are required to notify the customer before the scheduled payment date or a dollar range can be specified in the enrollment process, and the customer can waive the notification. If the customer authorizes you to initiate the Direct Payment on your website, the customer enters the payment amount and notification is typically made to the specified customer email address. If the customer initiates the Direct Payment through his or her online bill payment service, the customer specifies the payment amount in that service.
Will my company lose the money that it collects in late fees?
There may be a dip in late fee revenue, but you save in processing and administrative costs. With Direct Payment, you could reduce the need for collections and gain a stabilized cash flow. Some companies have leveraged the speed, reliability and flexibility of Direct Payment to allow customers to authorize expedited or same-day payments, helping them avoid negative impact to their credit ratings.