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QuickBooks Online is very convenient because you can access it anytime, anywhere. Please note that there are limitations when you convert from QuickBooks Desktop to QuickBooks Online. That is because they have different features. Please check this article: What to expect when you switch from QuickBooks Desktop to QuickBooks Online.
We'll need to set up your direct deposit payroll again in QuickBooks Online Payroll. This is the reason why it's showing a paper check when your process it.
It's great that you were able to enter the employees' bank details. What we need to do is connect your bank to QuickBooks Online Payroll. Go to the Gear icon and select Payroll Settings. Under Bank Accounts, click on Company. Then, follow the steps in this link to complete the process: Connect your bank to Online Payroll.
You need to confirm the test transaction to verify an account and it may take 2 to 3 business days. I have additional articles here for more details about direct deposit:
Please post again here if you need more help. Wishing you all the best!