December 16, 2019

Payroll Industry Survey Shows Direct Deposit Gets Workers Paid On Time


Michael W. Kahn

Michael W. Kahn


Direct Deposit rules on payday. But you don’t have to take our word for it. The American Payroll Association’s annual “Getting Paid In America” survey backs that up. 

On the question of “How do you receive your pay?” the results were lopsided: 93% of respondents said Direct Deposit. 

And when asked “Is your paycheck delivered on time?” once again, 93% said it’s always on time. 

That’s a rather enviable record. Think about it: Have 93% of travelers never had a flight delay? 

“There are good reasons why Direct Deposit is so popular. It’s dependable and it’s safe. Your money is in your account when it’s supposed to be,” said Michael Herd, Nacha Senior Vice President, ACH Network Administration. 

“With the funds immediately available on payday, employees don’t have to wait for a check to clear to access their money. It’s available not only for withdrawal, but to cover bills, which can mean avoiding other fees.”

Incredibly, the survey found that 5% of respondents are still receiving a paper paycheck. 

“As we approach 2020, it’s long past time for American businesses to retire the paper paycheck and move fully to Direct Deposit via ACH,” said Herd.

As for the remaining 2%, their responses, all in fractional amounts, included payroll cards, prepaid reloadable cards, and other online payment systems. 

There were several other interesting findings in the survey, which APA conducted for National Payroll Week 2019. One hints that there might be interest among workers in more frequent paydays. 

When asked, “Would you like access to some or all of your wages on-demand as you earn them instead of waiting for payday?” nearly a third said yes. At the same time, two-thirds said they’d be unwilling to pay a fee for that access. 

“Existing Direct Deposit processes are fully capable of paying employees more frequently. And Same Day ACH is perfect for paying hourly or temporary workers as needed,” said Herd. “It’s particularly good for freelancers, independent contractors and other gig economy workers who may not have a regular payday, and want their money when their work is done.”

One of the survey’s more unsettling discoveries is in the answers to the question, “How difficult would it be to meet your current financial obligations if your next paycheck were delayed for a week?” Some 40% of respondents said “very difficult,” with another 34% saying “somewhat difficult.”

To bring awareness of the need to save, and to highlight the ease of saving by splitting Direct Deposit among checking and savings, Nacha is once again joining in America Saves Week, Feb. 24-29, 2020. We will have materials available for Nacha members to share internally and externally to spread the message that the easiest way to save is to save automatically. Please look for those in NewsLink in January.