Nearly 16 billion ACH payments were made last year, a 14.5% increase over 2005, as ACH payment volume doubles every five years. NACHA estimates that as many as 8 billion consumer bills were collected via the ACH Network in 2006, including pre-authorized debits, Internet and telephone payments, and checks converted into ACH payments. Annual volume for Accounts Receivable check conversion grew by an estimated 700 million payments to 2.8 billion, an increase of 32%. Internet-initiated ACH payments grew by an estimated 35% to 1.8 billion. NACHA estimates that 85% of Internet-initiated ACH payments are to pay bills via companies’ or billing services’ Web sites, and 10% are to transfer funds. The number of pre-authorized, automatic bill payments or Direct Payment increased by 6.1% to 3.3 billion payments. The total number of these business-to-business ACH payments grew to 2.3 billion in 2006, up 10.9% over 2005.
Comerica Bank has launched a new fraud protection service that will enable commercial customers to accept or reject ACH items before they are posted to their accounts. Comerica ACH Positive Payenables commercial customers to monitor and control their ACH activity with positive pay functionality. It is securely delivered through the Internet via Comerica Treasury Management Connect Web.
Electronic payments continue to grow, rising 56% from four years ago and more than 16% over the past twelve months. Nearly 14 billion automated clearing house (ACH) payments were made last year, which includes payroll direct deposit, Social Security benefits, tax refunds, direct payment of consumer bills, e-checks, business-to-business payments, and Federal tax withholdings. NACHA estimates that 6.5 – 7.0 billion consumer bills were collected via the ACH Network in 2005, including pre-authorized debits, Internet and telephone payments, and checks converted into ACH payments. Annual volume for Accounts Receivable (ARC) check conversion grew by more than 900 million payments to more than 2.15 billion, an increase of 60%. Internet-initiated ACH payments (WEB) grew by 38.9% to 1.34 billion. The number of Direct Debit pre-authorized, automatic bill payments increased by 5.3% to 3.1 billion payments. Direct Deposit in 2005 increased by 5.1% to more than 4.4 billion payments.
Northwest Airlines confirmed that it executed a definitive term sheet that would amend and restate its credit card processing agreement until the end of 2008. The current processing agreement was set to expire in April 2006. The new terms include a provision that will allow a certain level of funds to be withheld from receipts by the processing bank, which would secure all obligations under the agreement as well as those of the co-branded credit card agreement. Other terms of the new deal include an option for prepayment of miles and fees to Northwest from the credit card issuer under the “Worldperks” program, subject to the company meeting certain requirements. U.S. Bank currently issues the “WorldPerks VISA” for Northwest Airlines. Northwest is the nation’s fourth-largest airline.
ACH payments rose 20% last year to 12 billion, primarily driven by the accounts receivable check conversion application (ARC), which has exploded more than 50-fold in its first three years. Americans also used the Internet to initiate more than 1 billion ACH payments valued at $350 billion during 2004. Overall, the nation’s financial institutions originated 21.6% more ACH payments than in 2003 valued at $25.5 trillion. NACHA also reports that thee number of Direct Payments in 2004 increased by 6.7% to 3.0 billion payments. Financial EDI on the ACH Network grew by 21.6% in 2004. Last year, there were 764 million EDI-formatted remittance records accompanying ACH payments. The total number of business-to-business ACH payments grew to 1.8 billion in 2004, up 8.9% over 2003.
ACH Volume (in millions)
2004 2003 % Increase
Inter-bank 8,174 6,607 23.7
On-Us 2,884 2,485 16.0
Commercial Total 11,057 9,092 21.6
Federal Government 951 924 3.0
Total 12,009 10,017 19.9
Source: NACHA – The Electronic Payments Association
For the first time, the number of debits originated by commercial financial institutions exceeded the number of credits, largely due to the rapid growth of consumer e-checks which increased 154% last year to more than 1.3 billion payments. Totally, there were more than 10 billion ACH payments last year, valued at approximately $27 trillion, representing increases of 12.0% and 12.3%, respectively, over 2002. The five ACH consumer e-check applications accounted for 13.1% of all ACH payments in 2003. According to NACHA, the WEB, ARC, and TEL e-check applications are primarily used in consumer bill payment. Credit card issuers have been among the leading adopters of these payments. American consumers initiated 689 million ACH debits on the Internet (WEB), tripling in volume for the second consecutive year. NACHA estimates that 80% of these payments were to pay bills, 18% were to transfer funds, and 1% were to make purchases. The average amount of a Web e-check was $291. More than 220 million consumer check remittances were converted into ACH debits (ARC), an 825% increase over 2002. The average amount of an ARC payment was $296. Approximately 204 million consumer checks were converted into ACH debits at retail locations (POP), up 22%. The average amount was $70. Americans made 170 million e-check payments over the telephone (TEL) in 2003, up 151%. The average amount was $374. Retailers made 31.3 million re-presented check transactions (RCK) in 2003, up 20.1%. The average dollar amount was $155. The number of Direct Deposits in 2003 increased by 4.2% to more than 4.0 billion payments. The number of Direct Payments last year remained steady at 2.8 billion.
The number of ACH payments originated by financial institutions hit 8 billion last year, up 13.6% from 2001. The electronic payments handled by the ACH payments were valued at $21.7 trillion. The number of Direct Payments last year totaled 2.8 billion, a 10% increase over the previous year. The value of these payments was $2.0 trillion. E-Checks nearly tripled in 2002 with more than 490 million e-check payments made. Last year there were 233 million e-checks initiated via the Internet, up 213%. The number of e-checks at the POS was 167 million, up 89%. Over the telephone, there were 68 million e-check payments, up 680%. More than 24 million checks sent to remittance locations were converted to e-checks in 2002, the first year this application was available.
Equifax Secure Inc., Tuesday unveiled the ‘Equifax Secure E-Commerce Partners Program’ aimed at providing a single, comprehensive resource for next-generation solutions to facilitate highly secure, private e-commerce over the Internet and other networks. The program includes organizations focused on Internet commerce, including security/privacy firms, systems integrators, independent software vendors and hardware providers as well as Internet service providers. Targeted independent software vendors and systems integrators will offer public key infrastructure-based applications dedicated to providing secure Internet communications. Equifax Secure partners will support a variety of applications, including secure electronic mail, secure forms, electronic data interchange, virtual private networks, supply chain management, credit/smart card processing/applications, internet banking, and remote secure access or single sign-on.