Have you considered making the switch from cheques to direct deposit or EFT payments? Over the past few years, direct deposits have become more popular as many organizations, including First Nations, look for alternative payment methods. If you are still handing out cheques in your income assistance or post secondary departments, it might be time to consider if you should make the switch to electronic payments.
First and foremost, direct deposit transfers are simple and convenient. Setting up direct deposits in ASAP is particularly easy to do. In order to set up the program the first time, you just need to add the bank account numbers and then you are ready to go. Then when you want to make a payment, you just click the “make payment” button (it’s that easy). You no longer need to fight with printer jams and replacing toner cartridges. Seriously, why are printers always running out of toner?
Second, you should consider the financial costs. While there are transaction fees associated with direct deposit transfers, as of this writing, 25 cents per payment. This expense is still much lower than the higher cost of printing cheques. When you consider employee time, cheque paper, toner, and printer replacements, cheque printing is actually very expensive. Also, you may want to consider the costs of cheques for your payees. Money stores and other vendors usually charge hefty cheque cashing fees to your members. With direct deposits, like the ASAP EFT Program, there are no costs for the recipient. Meaning, your income assistance applicants receive their full entitlements without any third-party deductions.
You also might want to consider some of the issues surrounding cheques. They can get lost, damaged or accidentally voided. Unfortunately, cheque fraud and theft are also fairly common, making it a very insecure form of payment. Finally, cheques make bank reconciliations very time consuming because your bookkeeper needs to determine which cheques actually cleared the bank account. To summarize, cheques are a big pain.
In 2020, the year of social distancing, there are new reasons to consider a direct deposit program. If someone is sick, they should have to go into the band office in order to receive their income assistance support payment. If there is a need to isolate or quarantine in the community, your administrators can safely pay all your members remotely with direct deposit transfers.
People say that cheques will soon become a payment method of the past. We are currently seeing both Canadian business and government departments moving away from cheques in favour of electronic payments and other paperless practices. If that is the case, it makes sense to be prepared with an alternative payment method. For many First Nations, that solution is direct deposits.