Why send a handwritten letter when you can shoot a quick e-mail or text message? That analogy may best describe the difference of processing paper checks versus direct deposit. More than being an outdated and time-consuming practice, writing paper check is a more costly process for many businesses.
NACHA, a trade association of electronic payment vendors, conducted a survey among U.S. companies with less than $20 million in annual revenue that use a business checking account for the majority of their business. According to NACHA:
Bank of America offers a more robust figure for the true cost of paper checks. In fact, they figure the price is more like $4 to upwards of $20, based on the price of the check and shipping, plus the time employees spend writing, mailing, collecting and reconciling the check.
Employees may be at higher risk for fraudulent activity if they rely on paper checks, too.
According to a study by Tinucci & Associates for NACHA, “While the banking system itself is secure, the sheer number of times a check must be passed from hand to hand while it is being processed means there is less security available.”
Checks are generally safe, but direct deposit eliminates the amount of times funds are based back and forth, which makes the process more secure.
Safety and cost aren’t always at the forefront of employee concerns. How can employer relay the importance of direct deposit, effectively?
Payroll direct deposit is valuable and cost-effective for your organization. How can you encourage non-participating employees to get on board? Here are a few solutions:
Learn more about DailyPay and how it can improve your bottom line by incentivizing your employees to sign up for direct deposit.