Direct Deposit Isn't What It Used To Be

At Citi, $250 in monthly deposits or “qualifying transactions” is enough to waive the checking account fee. Those transactions can include payroll, pensions and Social Security. They can also include something more striking: Zelle payments as well as Venmos and PayPals that are sent via the Automated Clearing House (ACH). That could mean incoming money from a gig or even a payment from a parent. Citi calls it “the Enhanced Direct Deposit” and it’s a sign of the times. Income takes many forms nowadays. Or it can.

Payday may still come as a biweekly or monthly direct deposit, but income arrives in other ways, too: tips for manicures or parking cars or, say, money from selling bouquets at the local farmers’ market.

In 2022, Citi put its policy in place to help “remove a barrier that workers may face who primarily receive income through peer-to-peer payments,” said the bank in a press release.

It’s a group Cash App watches up close: workers outside the traditional W-2 paycheck. In June, Block (Cash App’s parent company) published “The Modern Earner Economy,” a report that found that the number of adults earning income independently alongside other sources grew to 54 million in 2026, up 30 percent from 2024.

For Cash App, that trend is among the reasons why the company’s definition of a primary account is broader. As the report put it: “For traditional banks, the absence of direct deposit may signal a weak customer relationship. On Cash App, it doesn't. Twenty one percent of Cash App customers name Cash App as their primary financial account, and of those, only 22 percent receive traditional ACH direct deposit. The rest anchor through other inflow types: peer payments, gig platform payouts, instant deposits to debit cards, and cash deposits at retail locations.”

No wonder why Cash App counts original credit transactions, which it defines as instant payouts sent to a Cash App Card from gig platforms like DoorDash or Lyft or DailyPay, as qualifying direct deposits for Cash App Green, a product that gives customers added benefits, like priority phone support and a higher APY.

There's a good reason for that policy. Atomic's data shows that even when Cash App accounts are linked to a customer's primary bank, 95 percent of the outgoing transactions within the app remain P2P payments with only 5 percent of outgoing transactions pushing funds back to a debit card or checking account (the outgoing transfers, however, are often double the value).

Independent workers tend to juggle multiple gigs to chase the highest-paying ones, according to Ualett, a cash advance provider for independent workers.

Based on more than 100,000 Ualett customers active in gig work last quarter, Ualett said 35 percent are active on two or more gig platforms at once, like Lyft and DoorDash. Moreover, 48 percent have two or more income sources once non-gig income is counted alongside gig earnings.

“That points to a hybrid income model,” said Jay Millard, chief revenue officer at Ualett. “A customer might run several gig platforms at once, add a traditional payroll job on top of gig work, or earn income from self-employment and business activities.”

That also aligns with what Atomic sees. According to Andrea Martone, co-founder and chief product officer at Atomic, around 30% of account holders who complete a direct deposit switch on a gig platform also complete a direct deposit switch for another gig or job.

In short: It’s a patchwork quilt.

Citi’s definition of what qualifies as an Enhanced Direct Deposit is broader than that of a typical bank, whether the qualifications make the account free or earn perks. There, at the big bank, waiving a fee only requires a pulse of some money appearing in the account every month. It is the kind of flexibility that could help the bank’s checking account appeal to a wider audience at a time when Cash App, PayPal and Venmo have been gunning for a role banks once had largely for themselves: the place where a person’s money lands. More broadly, The Financial Brand reported that Citi wants the estimated $3 trillion in assets its customers keep elsewhere. Bank executives call that quest building “primacy.” Citi’s efforts to do so are many but include tinkering with direct deposit.

Yet, to a skeptic, loosening the definition of direct deposit could look like an excuse to claim primacy for Venmo transfers rather than making the rules more expansive.

No surprise then that what is considered a direct deposit is up for interpretation. To qualify for a referral bonus, Chime, for example, does not count PayPal, Cash App or Venmo transfers as direct deposit. The neobank does, however, count gig work payers. Another difference? Chime says: “Multiple smaller deposits do not combine to meet the $200 threshold. A single deposit must be $200 or more to qualify.”

Citi’s policy, meanwhile, only requires the qualifying transactions to total at least $250 each month.

The nuances shine a spotlight on a question: What do these credits really prove?

To that point, Ualett’s Millard said: “Payment apps are deeply embedded in the financial lives of this population. Gig workers assemble their own mix of apps to cut fees and get paid faster. But these apps only move the money; they aren't evidence of the economic activity that generated it: 81 percent use at least one of Zelle, Cash App, or PayPal and Zelle alone appears in 68 percent of accounts.”

There’s a question around scale, too. Nacha, the governing body for ACH, says direct deposit is the dominant way consumers aged 22-34 get paid for work. According to a recent online survey Nacha conducted, 77 percent of young workers reported being paid through direct deposit, compared with 17 percent through a non-bank payment app and 5 percent through Zelle. While its gig-only sample was relatively small, the Nacha spokesperson said the majority of them said they receive payments through direct deposit.

So will more banks redefine direct deposit policies to broaden their reach? Or will direct deposit continue to signal primacy, with P2P apps just peppering in some pocket change?

At the very least, the account is used and that’s a start.