Same-Day Payments Continue to Pay off in Volume Gains for the ACH Network

While the payments business moves toward real-time transfers, faster payments on the nation’s automated clearing house network continue their dramatic rise following a 10-fold increase in the transaction dollar limit earlier this year.

Transactions cleared the same day they’re initiated totaled 176.6 million in the quarter ended Sept. 30, up 23.5% year-over-year, Nacha reported Tuesday. But the dollar volume exploded, rising 102% to $478.5 billion. Nacha is the governing body for the ACH network. The second quarter was the first full period in which the new limit was in effect, resulting in a 94% jump in same-day transaction value.

“As more users of the ACH discover same-day ACH, they are seeing the value it provides,” said Jane Larimer, president and chief executive of Nacha, in a statement. “With a $1-million capability for same-day ACH payments and settlement with funds availability four times daily, the ACH network is helping to meet America’s faster payment needs.” She added that same-day ACH payments so far this year have totaled more than $1.25 trillion.

Same-day ACH is part of a general trend toward faster settlement of payments across a variety of networks as the payments industry moves toward real-time capability. The Federal Reserve is expected to launch its FedNow real-time payments network next year.

Overall, the ACH system handled 7.6 billion payments in the third quarter, up 4.2%, carrying a dollar volume of $19.2 trillion, a 6% increase.

Nacha also reported peer-to-peer transactions using the ACH rose 15.5% in the quarter, to 76 million, slowing from the 24% pace shown in the second quarter. Business-to-business payments jumped 11.5% to 1.5 billion, nearly equaling the 12% increase in the second period on a large and rapidly rising pool of transactions. Nacha cites an Association for Financial Professionals study indicating one-third of B2B transactions in the United States and Canada are now conducted by check, compared with 81% in 2004.

In other specific channels, transactions classified as Internet payments rose 10.2%, to 2.4 billion, while health-care transactions inched up 3.8% to 113.6 million. Direct-deposit volume dropped nearly 4%, to 2 billion transactions.