ACH growth stoked by 50 endpoints

The automated clearing house (ACH) system was used to deliver 20.2 billion transactions in 2011, an increase of 4.35 percent over 2010, according to statistics just released by NACHA the Electronic Payments Association. Altogether, financial institutions moved $33.91 trillion through the ACH last year, NACHA reported.

NACHA said greater adoption of three specific types of transactions drove "the steady growth" of the ACH network in 2011:

1. "Native" electronic payments
2. Consumer online payments
3. Vendor payments and other types of business-to-business (B2B) transactions

Native electronic payments are end-to-end electronic transactions; no checks are involved. The total number of these ACH payments rose 5.31 percent last year over 2010 volumes, NACHA stated.

Checks, cash declining

NACHA also noted that 56 percent of payments sent through the ACH last year were directed to just 50 financial institutions.

The use of new ACH formats that allow consumers to access the network for online banking and bill payment services rose 13.35 percent, indicating more financial institutions are enabling consumers to initiate these types of credit payments.

WEB transactions ACH debit payments authorized by consumers online or via mobile devices grew 9.45 percent and made up 16.67 percent of total ACH traffic last year. NACHA estimates 80 percent of these payments were online bill payments.

"These statistics show that more and more consumers and businesses are making a conscious decision to use electronic payment options over paper checks or cash," said Janet O. Estep, NACHA's President and Chief Executive Officer. "The breadth of safe and convenient payment options available through the ACH Network makes electronic payments a flexible choice for consumers."

Estep also referenced NACHA's efforts to adapt the network's rules and procedures to better meet consumer and business requirements. B2B transactions via the ACH showed steady growth rates as well, with significant growth in the use of addenda records for these transactions. "This shows that businesses are embracing the core competency of the network to transmit payments plus information, as they realize the value of straight-through processing," NACHA said.

Even though the ACH is growing, network quality indicators are positive, NACHA reported. The overall rate of return was just 0.98 percent last year, compared to 2.0 percent in 2010. The return rate for unauthorized debits posted an even bigger fall: from 3.14 percent in 2010 to just 0.03 percent last year. "This sustained positive trajectory of unauthorized returns attests to the quality of ACH transactions," Estep said.

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