As Consumers And Businesses Turn to Electronic Channels, ACH Growth Accelerates

For the nation’s automated clearing house network, payments trends already under way before the coronavirus pandemic are still unfolding—only faster. 

ACH payments initiated on the Web to pay bills and make other transfers totaled 2.1 billion in 2020’s fourth quarter, a 15.2% increase year-over-year, Nacha reported Thursday. Herndon, Va.-based Nacha is the governing body for the network, which links virtually every financial institution in the country. The result for Internet transactions comes as consumers and businesses scramble to avoid in-person payments in the face of  Covid-19. Likewise, peer-to-peer ACH payments ballooned nearly 44%, totaling 61.8 million for the quarter.

Meanwhile, businesses and governments have increasingly turned to electronic channels for payroll and other disbursements to individuals. Nacha reports these direct-deposit payments came to 2.1 billion in the quarter, up 11.1%.

The increase in electronic activity came as check conversions continued to decline, falling 23% in the quarter, Nacha said. These conversions allow recipients of paper checks, such as billers and retailers, to convert the checks to an electronic format.

Same-day activity, in which both debits and credits are settled on the day they’re initiated, also continued a long-term rise, reaching $139.2 billion on 96.7 million transactions. The dollar value was double the value processed in 2019’s fourth quarter, while transactions were up 36%. The fourth quarter in 2019 was the last full period before Nacha last March raised the cap on same-day transactions to $100,000.

Overall, volume on the network climbed 8.9% year-over-year, reaching 7 billion transactions. The annual rate of increase in transactions on the ACH has exceed 5% since 2015 and 7% since 2018.