More Than Half of Americans Use Direct Deposit and Direct Payment to Save Hundreds of Dollars a Year According to NACHA; May is National Direct Deposit and Direct Payment Month

HERNDON, Va.--(BUSINESS WIRE)--May 3, 2004--With time becoming a precious commodity, a record number of consumers are turning to Direct Deposit and Direct Payment to regain time otherwise spent in line at their bank or spent writing checks to pay bills. In order to encourage consumer use of electronic payments to manage their money, The Electronic Payments Association - NACHA, has declared May to be National Direct Deposit and Direct Payment Month.

Educating consumers about how electronic payments can help them manage their finances is the cornerstone of Direct Deposit and Direct Payment Month. More than 60 percent of consumers are enrolled in Direct Deposit, up over 4 percent from 2003. Direct Payment (a pre-authorized debit that uses the Automated Clearing House network for recurring consumer bills such as mortgages, loans, and utilities) is being used by more than 50 percent of Americans. By using Direct Deposit and Direct Payment, consumers on average can save more than $400 a year.

“Every summer, millions of vacationing Americans travel for a week or more at a time. As people plan for their vacations, they should consider using Direct Deposit so their pay is in their account and Direct Payment so their bills are paid while they are away”

In 2003, the number of Direct Deposits increased to more than 4 billion transactions ranging from payroll, expense and travel reimbursements, to pensions, Social Security and mutual fund distributions. Nearly 3 billion Direct Payments were made. While most people know about Direct Deposit and Direct Payment, they are unaware of the ways Direct Deposit and Direct Payment can save them money and simplify their lives.

Reasons for Using Direct Deposit:

-- Security - Payments made by Direct Deposit can never get lost or stolen.

-- Convenience - Direct Deposit users gain the equivalent of 3 days a year by not having to deposit their pay or other payments.

-- Save Money - Direct Deposit users save almost $140 a month more than those who do not. Over a ten-year period that number translates to more than $16,000.

-- Access to Money - Taxpayers who receive their tax refunds through Direct Deposit get their refunds faster than those who receive them by check. More than 44 million taxpayers elected to have refunds made by Direct Deposit in 2003, a 12 percent increase from the previous year.

-- Avoid the "Payday Mayday" - Pay is deposited automatically into employee accounts on payday. They do not have to plan their day around depositing a check.

Reasons for Using Direct Payment:

-- Protect Personal Identity - In 2003, more than 7 million consumers were victims of identity theft. By reducing the amount of mail with personal information on it, consumers reduce the risk of becoming a victim. Studies have shown that consumers who use electronic payment options are 10 percent less likely to have their identity stolen than those consumers who pay by check.

-- Gain Time - Direct Payment users gain the equivalent of 3 days a year not writing checks to pay bills.

-- Protect Credit Rating - According to research conducted by SWR Worldwide in 2000, 8 in 10 Americans admitted that they've made a late payment leading to financial and credit issues. Using Direct Payment ensures that bills are paid on time, every time. That means no penalties or late fees.

-- Plan for the Future - Payments can be divided up into various accounts helping users plan for the future by "paying themselves first."

"Every summer, millions of vacationing Americans travel for a week or more at a time. As people plan for their vacations, they should consider using Direct Deposit so their pay is in their account and Direct Payment so their bills are paid while they are away," states Rich Oliver, Senior Vice President and Retail Payments Product Manager, Federal Reserve Bank of Atlanta. "A recent survey showed that while traveling, 25 percent of those without Direct Deposit left their pay in their mail slot at work and 19 percent left it in their mailbox at home. By using Direct Deposit, consumers can rest assured that their pay will be deposited into their bank account on time, every time."

Using Direct Deposit and Direct Payment saves money for employers and the country as well. Companies of all sizes can substantially reduce costs by paying employees by Direct Deposit. Depending on the size and infrastructure of a company, the cost reductions can be anywhere from $1000 a month to more than $15,000 a month. The United States Department of the Treasury saves $0.62 per payment when benefit recipients choose to use Direct Deposit - a considerable savings when adding up the amount of payments made every month.

About NACHA - The Electronic Payments Association

NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), electronic checks, financial electronic data interchange (EDI), international payments, and electronic benefit services (EBS). Visit DirectDeposit.org, DirectPayment.org, or nacha.org for more information.