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What is direct deposit?

Is direct deposit right for my company?

What if an employee doesn’t have a bank account?

How can I be certain my employees want direct deposit?

Will converting to direct deposit cost a lot of money?

Do I need special software or technology?

How do employees know when pay has been deposited in their account?

If we have a problem with direct deposit, how does it get resolved?

Will our company lose the float we get with check payments?

What’s the risk of fraud with direct deposit?

Does my payroll system need to record any special data for payroll cards?


There are two kinds of direct deposit. Electronic payments deposited directly into an employee’s checking or savings account are by far the more common and preferred form. Direct deposit to a payroll card, a type of reloadable prepaid debit card, is an alternative method.

Yes. No matter how big you are or what industry you’re in, direct deposit can save you time and money, increase productivity, and reduce account problems.

We can help. Through Bank on San Francisco, an award-winning program from our Office of Financial Empowerment, unbanked people can find free or low-cost checking accounts at 14 San Francisco-area banks and credit unions. Even if an applicant has had trouble getting accounts in the past, or has never had an account before, Bank On can help.

Even if they don’t know about direct deposit, they’ll probably like it once they try it. According to surveys taken by NACHA, the Electronic Payments Association, 97% of direct deposit users report being “very satisfied” with the service.

No. Start-up costs (if any) are limited, and most companies recoup any costs within the first year, thanks to increased productivity and reduced (or eliminated) costs for payroll administration, printing, postage and error resolution.

Your payroll processor, bank or credit union can provide what you need to start offering the service. Also, most business software packages now include direct deposit as a standard feature.

Employees will still receive their payroll (“pay stub”) information. Most companies issue a dated payment stub that looks just like the stub sent with a paper check. The stub shows the amount and date of the deposit, as well as an itemized list of deductions. This can also be delivered electronically, reducing paper waste.

Problems are rare. If you experience one, you’ll resolve it directly with your financial institution or payroll provider. Employees can verify deposits by calling their financial institution, or checking accounts online.

Yes, but you’ll do even better with direct deposit. The savings from direct deposit —administrative costs, printing, mailing and error resolution fees — can add much more to your company’s bottom line. Your administrative costs go down by as much as 90%. Between new technology and today’s low interest rates, float is rapidly becoming a thing of the past.



Very low, especially compared with paper paychecks. Criminals can’t alter or counterfeit payroll checks, because there are none. Your employees’ account numbers are less exposed. Many experts will tell you that one of the easiest ways to prevent check fraud is not to issue checks at all.

No. The system records the same information it would record for direct deposit.