Direct Deposit has been common since (at least) the 80s, when I first worked in banking.
There are, however, always going to be holdouts who do not want or cannot use direct deposit. The reasons range from just being a bit stubborn and old-fashioned and liking to SEE the check to having some garnishment in place and fearing the agency holding the levy/garnishment will find the funds before they can be withdrawn, to having such horrid credit that no institution will open even a savings account. There are folks who don't want a spouse (or ex-spouse) to see how much their paycheck is-either because they are hiding assets and income or because they are putting money away in savings on the sly. And then there are the cases where the company has a record of messing up direct deposits and causing problems in the account-having a paper check in those cases means that (assuming the money actually exists) the recipient can go to the issuing bank and get cash and KNOW that there isn't going to be a problem down the road.
By the time I left banking (1999/2000), direct deposit was the most common way of getting paychecks from medium sized or large companies, regular retirement payments and Social Security. Smaller companies, however, were still doing paper checks, for the most part.
My current company strongly encourages direct deposit. When I was originally hired, about 65% of our employees were "Road" workers (fly home every weekend, otherwise on the road) and paper checks would be a huge hassle for the employees-so pretty much everyone had it. The company was one of the very early adopters of direct deposit, according to the folks who have been with the company 20 and 30 years.