E-Checks Help Fuel Double-Digit Growth in ACH Volume

The automated clearing house system handled more than 10 billion electronic transactions in 2003, and the conversion of checks into ACH debits helped fuel the growth, according to statistics released today by the National Automated Clearing House Association at its annual conference in Seattle. Total ACH transactions reached 10.017 billion last year, representing growth of 12% over 2002. Of these payments, electronic ACH debits?also called electronic checks?accounted for 13%, a remarkable proportion given that the ACH's e-check services began only in 1998. The total of 1.3 billion e-check transactions represented growth of 154% from 2002's level. The ACH tracks e-checks in five categories. The largest of these last year was WEB, or payments on the Internet, largely to pay bills. WEB transaction volume tripled in 2003, as it did in 2002, reaching 689 million debits. NACHA estimates 80% of this volume was used to pay bills, while 18% were used to transfer funds and only 1% were used to make online purchases. ARC, or conversion of consumer remittance checks sent to lockboxes into ACH-formatted debit items, was second in volume among the five categories, with more than 220 million transactions. This is the hottest of the five e-check categories, with 825% growth. Coming in third were point-of-sale purchases, or POP, with 204 million transactions, or growth of 22% over 2002. POP's average ticket last year was $70, about $20 less than the average on a credit card transaction and about $30 higher than the average tender on debit cards secured by personal identification numbers. Fourth was TEL, or transactions initiated on the phone, with volume of 170 million e-checks, up 151%. Fifth was RCK, which measures electronic representment of checks returned for insufficient funds. Retailers did 31.3 million of these last year, up 20%. In a statement also released today celebrating its 30th anniversary, NACHA observed that it took about 10 years for the ACH to reach 1 billion transactions, the figure the network's volume grew by last year.