A ‘Thriving’ ACH Logs 9.5% Growth, Adding to a Recent Record of Quarterly Expansion

With same-day transaction growth sizzling, the automated clearing house network overall notched another quarter of robust growth. The system logged 6.2 billion transactions in the quarter ended Sept. 30, up 9.5% over the third quarter of 2018, according to figures released Tuesday by Nacha, the network’s governing body. Total payment volume reached $14.1 trillion, almost 11% higher than the year-ago period. The latest quarter included one more banking day than the same period last year, so accounting for that difference, Nacha figures transaction volume on a per-day basis grew 7.8%.

“The modern ACH Network is thriving,” said Nacha president and chief executive Jane Larimer, in a statement. Larimer, a long-time Nacha executive who succeeded Janet Estep earlier this year as CEO, called the latest performance “record volume growth” for the ACH.

The latest quarter also saw same-day volume exceed the 1-million mark in daily transactions, Nacha announced. The network, which reaches virtually every financial institution in the country, introduced same-day credits in 2016, followed by same-day debits a year later. Altogether, transactions processed on the same day they were originated totaled 66.6 million in the quarter, a 54% rise from 43.2 million in 2018’s third quarter. Same-day dollar volume was $67.1 billion, up 65%.

On that performance, Nacha predicts same-day payments will total 250 million in 2019, up more than 40% from 177.9 million last year.

Same-day ACH processing has cleared or will soon clear a couple of procedural hurdles and is looking to clear another one that depends on cooperation from the Federal Reserve. Next March, the cap on same-day payments will quadruple to $100,000, answering a longstanding request from many in the industry for a higher limit. Last month, another change moved funds availability for some ACH credits sooner in the day.

On top of that, Nacha members have approved adding a third, and later, processing window each business day for same-day transactions. The new window would come at 4:45 p.m. Eastern time, or 1:45 p.m. Pacific time. That’s two hours later than the current cut-off for the day and gives banks in the West more time to enter transactions, Nacha says. But the move requires action from the Fed, Nacha says. The nation’s banking regulator would have to keep its National Settlement Service open an hour later, which would require its Fedwire service to operate for an additional 30 minutes.

Nacha hopes the new window will take effect March 19, 2021. “There are other processes and systems involved, and the Fed has responsibilities to all payment system stakeholders. We don’t take those lightly. But we believe in the necessity of improving the payment system for all U.S. financial institutions,” Larimer said in an open letter posted in July on Nacha’s site.

Peer-to-peer transactions were the ACH’s fastest-growing category in the quarter, rising nearly 19% year-over-year to 38.9 million. That was followed closely by other Internet-based payments, up 15.6% to 1.7 billion.