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For many consumers, direct deposit is now money in the bank Electronic banking is gaining popularity with many workers.


ATLANTA -- Mike Parker hates going to the bank.

Taking time off work, searching for a parking spot and then standing in teller lines isn't his idea of convenience. That's why he decided 10 years ago to have his paychecks electronically deposited into his bank account.

Now he says he wouldn't change back if you paid him.

"It's just a tremendous convenience," says Mr. Parker, a police major with the Metropolitan Atlanta Rapid Transit Authority. "With my job, it's hard to get to the [MARTA] credit union. This way, I know my check is deposited, and I don't have to worry about it."

Neither do a growing number of American consumers. Nationally, about 25 percent of all consumers use direct deposit, compared with 10 percent just four years ago.

Some consumers still fear the technology and worry that their money may be lost. But experts say mistakes, such as losing a deposit or putting it in the wrong account number, are more likely to be made by bank tellers than with electronic banking.

Direct deposit got its start in the mid-1970s, mostly with government accounts. The service is now used by more than 60 percent of Social Security recipients.

But bankers are starting to make an aggressive push to increase those figures even further. They point out that in Japan nearly all workers use direct deposit, as do more than 90 percent of workers in several European nations.

The program, bankers say, offers benefits to everyone:

It makes life easier for consumers like Mr. Parker, who no longer have to worry about getting to the bank or having an account with a bank that is close to work. They simply get a pay stub instead of a check on payday.

Banks can save up to 60 cents on every paycheck deposited electronically rather than through a teller window.

Employers can save thousands of dollars a year in check processing costs. They also can save money because employees don't waste productive time at the bank.

One study found that employees receiving paychecks are likely to spend up to 20 minutes more time away from the office on payday than workers using direct deposit.

"We think direct deposit can save businesses anywhere from 10 cents to $1.25 per every paycheck they process," said Michael Paulette, executive officer of NationsBank and chairman of the National Automated Clearing House Association. "If a person has to go the bank, that is often time away from work. And our estimates are that can vary from eight to 24 hours a year.

"If you consider the number of people across the country just taking a few hours here and there, you see that it can have a huge impact."

The savings and convenience mean that the number of consumers making use of direct deposit is likely to continue to rise, according to an Atlanta-based research firm. Synergistics Research Corp. expects use of the service to soar, especially as older consumers move out of the work force and are replaced by younger workers who are more comfortable with technology.

"We think that the '90s will be the decade of remote banking, much less face-to-face banking," said Anne Moore, president of Synergistics. "But age is the biggest factor in terms of the interest level in direct deposit."

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