ANN ARBOR, Mich. – A new direct deposit program will be available to members of MidWest Financial Credit Union who own businesses. On Aug. 1, the $165 million credit union and UMHS Financial launched EZ Pay, a Web-based application that accesses the national electronic payments system and initiates direct deposit services. UMHS Financial is a secondary brand that MidWest offers to the University of Michigan Health System. The way EZ Pay works is an employee authorizes their employer to direct deposit their paycheck. The employer gives the payroll information to a participating financial institution. The financial institution transfers that information to an Automated Clearing House (ACH) operator, such as the Federal Reserve. The operator validates the transaction and forwards it to the employee's designated financial institution. The employee's designated financial institution deposits the funds into the employee's account and the transaction is complete. "We wanted to offer time and money savings using an electronic process," said Tanya Winokur, MidWest director of electronic payments. Employees do not have to have accounts at the credit union to participate, Winokur said. According to MidWest, it can cost a business between 75 cents and $2 per check to create and distribute payroll checks not including the cost to cover lost or stolen checks. Depending on the size of the business, EZ Pay could reduce the processing to less than 50 cents and even cheaper per check if the employee has an account at MidWest. Winokur said it should take less than a month to set up EZ Pay. MidWest's latest business offering comes a year after it, along with four credit unions, formed Michigan Business Connection, a business lending CUSO, said Lora Bingham, MidWest marketing and communications director. The participating credit unions are MidWest Financial; State Employees CU, Lansing; Detroit Edison CU; Macomb Schools and Government CU; and Christian Financial CU, Roseville. Each credit union invested $1 million in start-up capital for the CUSO. Bingham said while there are no hard statistics on the number of MidWest members who own businesses, a "significant portion" of its 15,000 member base are entrepreneurs. [email protected]