More Gen Y Use Direct Deposit via ACH for Environmental Reasons

Colleen Morrison
December 9, 2011 | COMMENTS

Gen Y is more likely than other generations to use Direct Deposit to reduce its impact on the environment, according to a new study by NACHA – The Electronic Payments Association and PayItGreen.

New findings from the 2011 PayItGreen Survey reveal that 27 percent of Gen Y indicate they use Direct Deposit to help the environment, versus 19 percent for other generations.

This follows current research that shows the majority of Gen Y believes they can help change the world for the better by their habits. A separate survey concluded that 89 percent of Gen Y is likely to switch from one brand to another (if price and quality are equal) if the second supports a cause.

“Gen Y brings a new energy to products and services that support causes like environmental sustainability,” said NACHA president and CEO Janet O. Estep. “Although convenience is still the number-one reason that all generations use Direct Deposit, Gen Y is leading the environmental charge to help reduce paper use by receiving their pay electronically.”

The survey also found that “reducing clutter” was a greater priority to Gen Y (32 percent) than other generations (21 percent) in choosing Direct Deposit. Convenience was the most cited reason to choose Direct Deposit for all generations at 70 percent for Gen Y and 72 percent for other generations.

“A quarter of Gen Y respondents cited environmental reasons for using Direct Deposit,” said James Van Dyke, president and founder of Javelin Strategy & Research. “That might not seem like a huge number, but it’s noteworthy to us because it suggests behavioral motivation for this younger generation. If nothing else, businesses would be well served to target their payroll campaigns differently to Gen Y than other generations.”

The survey also noted that 38 percent of late adopters or “laggards” said they used Direct Deposit because their employers require it. The inherent safety of Direct Deposit versus paper checks was cited by 36 percent of Gen Y respondents and 35 percent of non-Gen Y respondents as a motivator for use.

“We’re always talking about how to switch that last 25 percent over to Direct Deposit,” said Estep. “This research shows that where state law allows, employers may want to consider requiring employees to receive their pay electronically. Once employees start using Direct Deposit, its safety, security, and convenience make them true believers.”

NACHA supports the growth of the ACH Network by managing its development, administration, and governance. Visit www.nacha.org, www.electronicpayments.org and www.payitgreen.org for more information.