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Introducing Go Direct
Introducing Go Direct
Go Direct is a national campaign sponsored by the United States Department of the Treasury and Federal Reserve Bank to promote direct deposit use among people who receive Social Security and other federal benefits. It’s widely understood in the financial community that electronic payments are a safer, easier alternative to paper checks, yet growth in direct deposit enrollments has stalled in this population. Go Direct aims to reverse this trend with the help of key partners – including financial institutions.

It is not an overstatement to say that the participation of financial institutions is vital to the success of Go Direct. Most people who receive benefits in check form tend to cash them at a bank or credit union and consider tellers a trusted source of information. At the same time, the objectives of the campaign align closely with the goals of most financial institutions. Go Direct programs for boosting direct deposit use can help financial institutions increase their customer base, reduce operational costs, enhance customer or member loyalty and leverage existing marketing programs.

The Business Case for Go Direct
Go Direct is a national campaign that reaches out to people through organizations they know and trust to educate them about the many advantages of direct deposit. As proved during our six-month pilot campaign in 10 markets – which ended March 31, 2005 and succeeded in motivating tens of thousands of paper check recipients to switch to direct deposit – Go Direct offers several key benefits to partner banks and credit unions.
Specifically, becoming a Go Direct partner can help your financial institution:

•           Increase your customer and member base. Go Direct reaches underserved and rapidly growing market segments, such as the Hispanic community. Of the approximately 12.5 million people nationwide who receive Social Security and SSI checks, at least 4.5 million lack bank accounts. Research indicates that un-banked check recipients are just as interested in direct deposit as those with accounts. This is an untapped opportunity to increase retail accounts;

•           Reduce your operational costs. Research shows that 81 percent of Social Security recipients cash their benefit checks at a bank or credit union. Financial institutions are servicing these consumers, including those with and without accounts. NACHA – the Electronic Payments Association estimates that paper transactions cost financial institutions 25 to 30 percent more than ACH transactions. Plus, direct deposit frees up your staff to focus on revenue-enhancing activity;

•           Reduce your check fraud risk. Check fraud is an increasingly critical risk for financial institutions. For example, the most recent ABA Deposit Account Fraud Survey Report estimated that attempted check fraud at banks totaled $5.5 billion in 2003, with $677 million in actual dollar losses for banks. The annual median expense per bank for preventing check fraud (not including losses) ranged from $5,000 for community banks to up to $9 million for money center banks;

•           Enhance customer and member loyalty. Direct deposit offers clear benefits for your customers and members. Federal benefit recipients are 30 times more likely to have a problem with checks than with direct deposit. The problems associated with lost or stolen checks are frustrating for all involved. In addition, consumers who switch to direct deposit report high satisfaction with the change and are less likely to change banks;

•           Reduce your paper-based transaction costs. Direct deposit is less expensive to process than a check. The Federal Reserve Board’s annual report indicates the Fed’s cost to process a check remained 4.5 cents in 2003, while the cost of processing an ACH payment was 0.66 cents per item. ACH transactions save consumers, businesses and the government billions of dollars each year;

•           Leverage your marketing and public relations programs. Go Direct provides financial institutions an opportunity to participate in a nationally branded campaign that supports their marketing strategy. The ABA reports that bank marketing budgets reached $9 billion and increasingly focused on retail opportunities, with 66 percent of expenditures aimed at consumers. From a PR perspective, Go Direct helps financial institutions garner positive media coverage. Extensive coverage during the pilot helped banks and credit unions establish themselves as trustworthy and active members of local communities.

The CBA strongly suggests member banks consider promoting the Go Direct program to your customers. The campaign makes it easy for people to sign up for direct deposit – they can call the Go Direct helpline at (800) 333-1795, they can visit to sign up online or they can stop in your financial institution or Social Security Administration office to sign up.

Posted on Sunday, December 31, 2006 (Archive on Saturday, March 31, 2007)
Posted by kdroney  Contributed by kdroney


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