Digital Transactions Authoritative, insightful and timely information for payments professionals
Overall automated clearing house transaction volumes grew only 1.5% in the second quarter versus the year-earlier period, but most of the electronic-check ACH applications grew faster. The notable exception was ARC, for accounts-receivable conversion of bill payments sent to lockboxes. Continuing a trend that started two years ago and likely is permanent, ARC’s transaction volumes fell 6.6%.
ARC is still huge, with 555.5 million transactions in the second quarter, but that was down from 595 million a year earlier, according to new figures from NACHA, governing body of the ACH. Consumers are writing fewer paper checks to pay bills but using online forms of bill payment more. “The future is all native electronic,” says Michael Herd, Herndon, Va.-based NACHA’s managing director of ACH network rules.
Most Internet-based ACH bill payments get the WEB e-check code. WEB volumes surpassed ARC’s for the first time in 2009’s fourth quarter (Digital Transactions News April 9). In the second quarter, WEB transactions grew 7.2% to 598.7 million versus 558.5 million a year earlier.
A related electronic bill-payment code, CIE, for customer-initiated entry, also is growing fast. In contrast to WEB, which debits the consumer’s account, a CIE is not an e-check but an ACH credit transaction that gets much of its volume from bill payments through online-banking sites. CIE volume was 34.1 million transactions in the second quarter, up 21.6% from 28.1 million in the prior-year quarter.
Despite the fall-off in check writing, the POP, for point-of-purchase, e-check code for conversion of check payments in stores got a surprising 11% pop in volume in the second quarter. Volumes hit 130.4 million transactions compared with 117.4 million in 2009’s second quarter. Herd says he doesn’t have a specific reason for POP’s strong growth. “My best estimate is that it would be an implementation by somebody,” he says. Leading retailer Wal-Mart Stores Inc. started using POP several years ago.
POP’s younger cousin, back-office conversion, or BOC, saw volume surge 26% to 44 million transactions in the second quarter from 35 million in the prior-year period. The growth likely was the result of many more small retailers adopting BOC, Herd says. Another e-check code, TEL, for telephone-based ACH payments, had 85.7 million transactions, up 4.3% from 82.2 million a year earlier.
Excluding on-us payments, the ACH racked up 3.89 billion total transactions in the second quarter against 3.83 billion in the prior-year period.
