POP Continues Its Rebound, But Will BOC Take a Bite?

The automated clearing house's point-of-purchase electronic-check code in 2006's fourth quarter once again posted the highest growth rate among the various e-check codes, but the new back-office conversion (BOC) application that went live March 16 could soon claim POP's place in the sun. According to new data from Herndon, Va.-based NACHA?The Electronic Payments Association, the ACH's rules-setting body, POP recorded some 86.4 million transactions in the fourth quarter, up 88.8% from 45.8 million transactions in the year-earlier quarter. The fourth-quarter numbers continued POP's impressive growth run that started last year after a long period of mediocre growth (Digital Transactions News, Dec. 27, 2006). POP allows retailers to convert checks to ACH debits at the point of sale. While some notable users include Wal-Mart Stores Inc., the world's largest retailer, many other retailers haven't adopted POP because of requirements that include signed customer authorization and the return of the voided check to the customer, along with the perceived need to equip all lanes with check scanners to capture the required data. BOC has less-stringent notification requirements and calls for just one scanner per location. While many payment processors expect BOC to be a hit, NACHA executives, citing the time it took for earlier e-check codes to gain market acceptance, are downplaying speculation about a tide of transactions out of the gate (Digital Transactions News, March 16). A full quarter's worth of BOC data won't be available until after the second quarter. NACHA reports that ARC, the accounts-receivable conversion e-check code, posted 613.2 million items, up 33.6% from 459.1 million in 2005's fourth quarter. WEB, which is the code for Internet-based transactions and is used mainly for online bill payments, grew 35% to 382.5 million transactions from 283.4 million in 2005's fourth quarter. TEL, the telephone-based e-check code, posted 76.3 million items in the fourth quarter, up 16.2% from 65.6 million a year earlier. In all, ACH volume, excluding on-us items but including commercial inter-bank and government transactions, grew 15.6% in the fourth quarter to 3.25 billion items compared with 2.81 billion year earlier. Total value of the items exceeded $6.75 trillion, according to NACHA.