Boosted by the addition of debit transactions Sept. 15, same-day automated clearing house transaction volume hit 10 million in October, up 140% from 4.1 million in August, according to ACH governing body NACHA.
Total value of the October payments was $9.14 billion, Herndon, Va.-based NACHA reported last week. The value of the debit transactions was $3.06 billion, with credits coming it at $6.08 billion.
NACHA launched same-day ACH credits in September 2016, and debits debuted on schedule a year later.
“Same-day ACH is a ubiquitous faster-payments solution that has been in the marketplace for more than a year, benefitting financial institutions and their businesses and consumers that want an option to move payments faster,” Jane Larimer, NACHA’s chief operating officer and general counsel, said in a news release. “With the introduction of same-day ACH debits in September, the ACH network now has both credits and debits as available faster-payments options to meet the needs of the industry, and we look forward to seeing same-day ACH grow in use and capability in the future.”
October’s transaction count breaks down to 5.8 million credits and 4.2 million debits NACHA reported. Respective numbers for September, in which debits were available for the latter half only, were 4.8 million and 2 million.
In the first six weeks of availability, businesses initiated more than 6 million of the same-day ACH debits. Ninety-four percent were for consumer payments, primarily bill payments and account transfers, and 6% were for business-to-business payments, according to NACHA.
Same-day ACH credit payments are primarily used for business-to-consumer payments, such as payroll and claims disbursements; business-to-business payments; and person-to-person transfers. Businesses and consumers have initiated 57 million same-day ACH credits since their inception in 14 months ago, NACHA says. The number of credit transactions grew 41% just from August to October of this year.
“Same-day ACH, based on the numbers published so far, is showing very good adoption and growth,” Sarah Grotta, director of the debit and alternative-products advisory service at Mercator Advisory Group Inc., a Maynard, Mass.-based research and consulting firm, tells Digital Transactions News by email. “As more financial institutions begin to originate same-day and as more organizations become aware and find use cases for [same-day ACH transactions], I am sure the growth will continue to climb.”
Same-day ACH debits launched about two months ahead of yet another service meant to give U.S. banks and businesses access to faster-payment services. That’s the real-time payment system called RTP from New York City-based The Clearing House, a payment organization owned by 25 banks. RTP uses a credit-push model that enables transactions to settle in as little as a few seconds.
Payments executives have been debating for two years about if and much new real-time payment services such as The Clearing House’s could cut into the ACH network’s volumes. Grotta predicts there won’t be a huge share shift.
“Although some [same-day ACH] volume will migrate to a real-time payment solution once available, I don’t believe that much volume will shift,” she says.
A determining factor will be cost, according to Grotta.
“It is anticipated that RTP will be more expensive than ACH, so businesses will make value decisions regarding when they want to use real-time payments versus a more economical, albeit slower ACH transaction,” she says. “RTP, at least in its current form, is a credit-only solution also, which impacts its utility.”