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Boosted by more all-electronic payments, total automated clearing house network transaction volume grew 4.2% in 2012 to nearly 16.8 billion transactions from 16.1 billion the prior year, ACH governing body NACHA reported Wednesday. The value of ACH payments increased 8.8% to $36.9 trillion.
WEB, an ACH code primarily for consumer debits through online bill payments, proved to be a star among NACHA’s numerous transaction codes. WEB’s volume jumped 10.2% to 2.95 billion transactions last year from 2.68 billion in 2011. WEB now accounts for nearly 18% of ACH volume.
In contrast, WEB’s paper-based cousin, ARC (accounts receivable conversion), slipped 6.9% to 1.86 billion transactions last year from just over 2 billion in 2011. ARC is the code for paper-check bill payments mailed to lockboxes and converted to ACH transactions. WEB’s volume surpassed ARC’s only in 2010.
Mike Herd, managing director of ACH network rules at Herndon, Va.-based NACHA, notes that WEB being more than a decade old but still growing at a high rate indicates a big market of “native,” or all electronic, ACH payments still awaits to be tapped as consumers abandon check writing. “For it to be growing by 10% or more is really a positive sign,” Herd tells Digital Transactions News.
NACHA also has spread WEB’s wings to cover more transactions such as Internet-initiated mobile payments and person-to-person credits. “The variety of payments continues to expand,” Herd says. “[Mobile] is a nascent area that is going to have some impact in coming years.”
A related code for bill payments, CIE, for customer-initiated entry, grew 7.6% to 168 million transactions in 2012. CIE transactions are ACH credits produced when consumers initiate a bill payment through an online-banking site.
Reflecting the decline of consumer check writing in stores, two ACH codes for point-of-sale payments, point-of-purchase (POP) and back-office conversion (BOC), both saw volumes recede. POP declined 7.9% to 454.4 million transactions and BOC slipped 1.9% to 191.7 million. Volume under the TEL code for telephone-based ACH transactions declined 5% to 349.1 million.
In all, the native electronic payments grew 6.4% over 2011 and now make up 85% of total ACH network volume, NACHA said. Total check-initiated transactions declined 6.8%.
The ACH network’s original code, PPD (prearranged payment and deposit) credits, which dates back to the early 1970s and covers direct deposit of paychecks and government benefits, grew 5.4% to 5.14 billion transactions in 2012.
International ACH transactions (IAT) proved to be the ACH’s network’s fastest-growing payment type last year, booming 49.6% from a small base to 43.9 million transactions.
NACHA says ACH transaction quality continued to improve in 2012. The unauthorized debit rate declined for the 10th year in a row to 0.0298% of transactions from 0.0300% in 2011. The rate covers both fraudulent transactions as well as those returned for other reasons such as administrative errors. Herd did not have have figures on what percent of returns are fraudulent. The overall network return rate declined from 0.98% in 2011 to 0.97% last year.
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