|ACH payment volume moves past 20 billion|
Total ACH payment volume grew to over 20.2 billion transactions in 2011, up 4.35% over 2010, according to new statistics released by NACHA—The Electronic Payments Association. ACH payments moved a total of $33.91 trillion over the network in 2011.
According to NACHA, the steady growth of the network can be attributed to the expansion of the use of native electronic payments, increased use of online payments by consumers, and the escalating use of the ACH Network for vendor payments and business-to-business transactions.
Native electronic payments—those payments which start as an electronic payment (i.e., noncheck conversion applications)—increased 5.31% over 2010. The statistics reflect an ongoing trend of increasing preference for fully electronic payments.
“These statistics show that more and more consumers and businesses are making the conscious decision to use electronic payment options over paper checks or cash,” says Janet Estep, president and CEO of NACHA. “As advancements within the payments industry continue, ACH payments also continue to adapt to meet various needs of both consumers and businesses alike.”
Consumer-initiated entry transactions grew 13.35% year-over-year, as financial institutions enabled direct payments by consumers via ACH credit payments. Web transactions—or direct ACH debit payments made when authorization is given via the internet or a mobile device—also continued on an upward trajectory. Web transactions increased 9.45% and made up 16.67% of total network volume. NACHA estimates that 80% of these transactions are to pay bills via companies' or billing services' websites.
“Consumers want convenient, versatile, and secure payment options,” says Estep. “Direct payment via ACH puts consumers in control and provides them with the flexibility to make payments through their bank or credit union’s online banking service, the companies they do business with, and via mobile applications. The breadth of safe and convenient payment options available through the ACH network makes electronic payments a flexible choice for consumers.”
In 2011, business-to-business transactions saw steady growth as well. CTX and CCD transactions—or those business transactions enabling the use of addenda records—increased 12.69% and 4.89%, respectively, over 2010. The use of addenda records for these transactions grew significantly as well, with CTX addenda use increasing 9.74% over 2010 and CCD addenda use increasing 13.43% during the same period. 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, according to NACHA.
Even though network use is increasing, the volume of returned transactions remained flat when compared to 2010. Overall, the network return rate decreased 2.0% to 0.98% of transactions in 2011.
The volume of debit transactions returned as unauthorized declined even more: 3.14% from 2010. The unauthorized debit return rate for 2011 remained steady at 0.03%.
[This article was posted on April 24, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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