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Four regional automated clearing house associations in the South will merge Jan. 1 under the name of PaymentsFirst Inc. The merger may be the biggest one yet among regional ACH associations in terms of participants and furthers the long-standing trend of smaller, mostly state-based ACH organizations pooling their resources as banks, their core constituency, continue to consolidate.
The merger announced Friday involves Atlanta-based GACHA, formerly the Georgia Automated Clearing House Association, the Alabama Automated Clearing House Association (ALACHA), the South Carolina ACH Association (SOCACHA), and the Tennessee Automated Clearing House Association (TACHA). In all, the four nonprofits represent about 860 financial-institution members and affiliated organizations.
PaymentsFirst will be headquartered in Atlanta and headed by chief executive Peggy Gachesa, currently GACHA’s president and CEO. The top executives of the other three merger partners will become senior executives in the new entity. The merging associations say PaymentsFirst will be the nation’s fifth-largest regional ACH association.
“We have been in discussions since August of 2013,” says Donna S. Ashworth, currently executive director at TACHA who will become executive vice president of risk and compliance services at PaymentsFirst. “The four of us have worked closely together over the past six years, and as we’ve done that we’ve realized there are many efforts we were duplicating efforts on.”
Ashworth adds that the directors and members of all four associations have signed off on the merger.
The 16 current regional ACH associations typically focus on member education and development of training materials and guidance about risk control, government regulations, and other matters of interest to bankers and companies providing automated clearing house services. As such, they complement the efforts of NACHA, the Herndon, Va.-based national ACH governing body.
Ashworth expects the merger will enable PaymentsFirst’s staff of 14 generalists to develop specialized expertise about ACH topics, enhancing the association’s value to members. “As the industry and the payment system have evolved and continue to evolve, our members expect more and need more services,” she says.
Banking researcher Nancy Atkinson, a senior analyst at Boston-based Aite Group LLC, says she isn’t surprised about the four-way merger given the ongoing consolidation in the banking industry.
“When a bank merges, there obviously is one less entity to join these groups,” she says. “I’m sure it is an efficiency play combined with ‘we’re running out of players we can sell our services to.’”
Other ACH merger activity in recent years includes San Francisco-based Western Payments Alliance’s (WesPay’s) Jan. 1 acquisition of ViewPointe’s Regional Payments Association assets, giving WesPay a presence in 12 states and Pacific territories; WesPay’s 2011 merger with Seattle-based Northwest Clearing House Association (NWCHA); and the 2009 merger of MPX and Payments Central to form Epcor, which serves members from the Mid-Atlantic states to the Great Plains.
