After Strong First-Quarter Growth, the Coronavirus Takes the Steam Out of the ACH

Like other payment networks, the automated clearing house was going great guns until mid-March, but thanks to the Covid-19 pandemic it’s now in the midst of a slowdown.

ACH governing body Nacha reported Thursday that total volume rose 7.1% year-over-year in the first quarter to 6.4 billion transactions, up by 423 million payments. Same-day volume jumped a full 42% to 75 million transactions from 52.7 million in 2019’s first quarter.

The good times won’t be rolling into the second quarter, however. “While ACH results for the entire first quarter are positive, the current coronavirus national emergency is already impacting payment system volumes, including the ACH,” Jane Larimer, Herndon, Va.-based Nacha’s president and chief executive, said in a news release.

“For the second half of March, there was a slowdown in payments volume,” the release says. “That includes ACH, where the slowdown in economic activity has affected the volume of payroll payments, bill payments, and supply-chain payments. This situation is likely to continue through the second quarter.”

The first-quarter total was composed of 3.7 billion debits and 2.7 billion credits. Total payment value grew 10.3% from a year earlier to $14.6 trillion.

Same-day ACH wasn’t the only source of network growth. Person-to-person payments grew 23.6% to 44.5 million transactions. Internet payments rose 14.8% to 1.8 billion, and health-care payments increased 13.5% to 88.7 million. Business-to-business transactions increased 11.7% to 1 billion while direct deposits rose 3.9% to 1.9 billion.

Nacha also released its annual listing of the top 50 ACH originators and receivers, this one for 2019. On the origination side, 2018’s top four leaders retained their respective positions. Wells Fargo & Co. led with 6.45 billion originations last year, up 10% from 2018. JPMorgan Chase & Co. originated 4.39 billion payments, up 6.1%, while Bank of America Corp. originated  2.75 billion, a 3.6% increase. No. 4 Citigroup Inc. reported 1.16 billion payments, up 7.1%. Capital One Financial Corp. displaced U.S. Bancorp to take fifth place with 779.1 million originations, up 16%. U.S. Bancorp fell to sixth place, originating 769.1 million payments, up 2.5%.

BofA retained its title as the leading ACH receiver with 2.57 billion payments, a 10% increase from 2018.