Automated Payments Partnership Focuses on Ease and Security of Direct Deposit in Fall Direct Deposit Campaign

For immediate release Oct. 2, 1998

Simple, safe and secure: that is the message the Federal Reserve and local automated clearinghouse (ACH) associations would like consumers and businesses to remember when they consider direct deposit — the automatic, electronic transfer of funds to a checking or savings account. Selected Federal Reserve Banks and local ACH associations belonging to the Automated Payments Partnership will emphasize the simplicity and security of direct deposit during their celebration of National Direct Deposit Week, Oct. 12-16, 1998.

Direct deposit has been available for more than 20 years, and more than half of all U.S. payroll and government benefit payments are made via direct deposit. Furthermore, direct deposit is well liked by its users: A 1998 study by the Federal Reserve indicates that 97 percent of employees who use direct deposit are very satisfied with the service.

"Direct deposit is a safe and convenient way to receive your paycheck, Social Security payment, pension or even investment dividend," said Bill Powell, assistant vice president in charge of cash and business development at the Federal Reserve Bank of Atlanta. "By having money electronically deposited into your account, you're assured that your payments are highly confidential. Very few people are involved with the processing of an electronic funds transfer. In contrast, up to nine people could see your information during the normal processing of a check."

Another benefit of direct deposit is that electronic payments are much more secure than paper-based payments. According to Powell, "With direct deposit, you eliminate the possibility that your check could be lost, stolen or fraudulently endorsed."

The goal of the Automated Payments Partnership's upcoming campaign is to increase individual enrollment in direct deposit programs and to encourage more businesses to offer direct deposit to their employees and vendors. "Direct deposit can be used for any ongoing, regularly scheduled payment and even for some occasional payments, such as tax returns," Powell said. "All you have to do is ask if your employer or payor offers direct deposit, and, if so, your employer or payor will gather the required information and authorization from you prior to issuing your payment."

Information disseminated during the campaign will aim to educate individuals, organizations and the public at large about the benefits of direct deposit. Activities undertaken nationwide will include special educational and promotional events at financial institutions, informational seminars, public service announcements and media outreach. Local campaign activities will include the placement of radio, movie theater and other advertisements promoting direct deposit as well as the distribution of free marketing materials to interested financial institutions and businesses.

Financial institutions that would like more information about campaign activities in their area should contact their local ACH association. Consumers wanting more information about direct deposit should contact either their financial institution or their employer. Additional information about direct deposit can also be found by contacting local Federal Reserve Banks or by visiting the Automation Payments Partnership's Web site at


Contact: Jean Tate 404-498-8035