Several bank companies doing business in the New York City area have joined a task force to promote payroll direct deposit services.

They are: Chase Manhattan Corp., Citicorp, Fleet Financial Group Inc., PNC Bank Corp., and Republic New York Corp.

Led by the New York Clearing House Association, the task force aims to increase the number of New York-area consumers getting direct deposit by 5% a year for five years.

Nationwide, direct deposit - which replaces paychecks with electronic automated clearing house credits to consumer bank accounts - has grown steadily since 1980. About 45% of all consumers last year used the service, according to figures from the National Automated Clearing House Association.

In the New York area, however, only about 38% of eligible people participate, New York Clearing House officials said.

For banks, the primary benefit of increased usage of direct deposit is a reduction in the number of paper checks the institutions must process. This leads to lower operating costs.

The promotional effort, which began this week, uses radio and direct mail campaigns to reach corporate human resource directors and members of professional and civic groups.

Promotions will be focused on New York City, northern New Jersey, southern Connecticut, Puerto Rico, and the U.S. Virgin Islands.

New York Clearing House executives said they believe they can help area banks boost direct deposit volumes.

"New York banks, especially large banks, thought they could do it themselves," said George F. Thomas, senior vice president at the New York Clearing House. "They've always felt they could do it independently, but they were not getting the success levels they wanted."

Alan Slater, chairman of the task force and a vice president at Citicorp, explained that the hypercompetitive nature of the New York market is one reason area banks individually had not promoted direct deposit more aggressively in the past.

For example, he said, if a particular bank had a 20% share of the retail market, a promotion aimed to boost direct deposit in the whole market was an inefficient use of bank funds: "80% of that money is wasted as far as I'm concerned," he said.

The fact that the region's largest bank companies are cooperating to promote direct deposit minimizes such concerns.

The New York promotion succeeds long-running national campaigns led by Nacha and the Social Security Administration.

Nacha began a direct deposit promotion in 1989 aimed at improving that year's direct deposit participation rate of 10%.

"Direct Deposit is a safer, faster and more convenient way to get paid," said Jill Considine, president of the New York Clearing House. "We're committed to getting hundreds of thousands more people in our district to participate."

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