Small Companies Using DD via ACH Likely to Use Direct Payment via ACH
Small businesses who already use direct deposit (DD) to pay employees are prime candidates for direct payment, according to NACHA, the electronic payments association. This data was released in conjunction with a statement from the Treasurer of the US on DD, which concludes that DD is a safer, more convenient way to receive a federal benefit payment than by paper cheque.
“The US Treasury calls DD ‘the right thing to do for benefit recipients and American taxpayers alike’, and clearly employers of all sizes can benefit as well,” said Janet Estep, NACHA president and chief executive officer (CEO). “Our study was designed to capture quantifiable data from small businesses to get at the heart of misconceptions deterring the use of DD, so we can help small businesses better recognise the time- and cost-savings afforded by electronic payments.”
The NACHA study examined small business attitudes toward DD and dove deeper to evaluate the connection between DD implementation and use of other financial services products. Revealing strong preferences towards automated clearing house (ACH) payments and showing the potential for direct payment adoption, more than 44% of small business DD users currently employ and plan to continue using other ACH services from their financial institution.
“DD, in many cases, is the entry point into the ACH Network for organisations, and from there, they begin to explore the business case for making more of their payments electronically,” said Estep. “The core competencies of the ACH Network – efficiency, ubiquity, security, and the ability to pass payments plus information – make it uniquely poised to offer strong solutions to businesses of all sizes.”
Specifically, the study concluded: