A Suddenly Revived POP Posts Highest E-Check Growth Rate

The formerly somnolent point-of-purchase (POP) electronic-check code continued on its newfound burst of energy in the third quarter, according to the latest automated clearing house volume report from NACHA?The Electronic Payments Association. NACHA reports POP volume hit 80.5 million transactions, up 92.8% from 41.8 million in the year-earlier quarter. POP's growth rate led the 13 standard entry class (SEC) codes tracked by Herndon, Va.-based NACHA, which governs the ACH. POP posted mediocre growth rates for years until the second quarter, when volume surged more than 43%. Sources attributed most of the growth to Wal-Mart Stores Inc., the world's largest retailer and one of the few that have made a major commitment to POP (Digital Transactions News, Sept. 13.). The POP code allows retailers to convert paper checks into e-checks at the point of sale. Many merchants, however, view POP as expensive and cumbersome because of the need to equip checkout lanes with check scanners and to train workers about the code's requirements. They also must get explicit customer approval for the transaction. NACHA expects the upcoming back office conversion (BOC) code, which takes effect in mid-March, will address POP's shortcomings. Overall ACH third-quarter volume, excluding on-us items, hit 3.09 billion transactions, up 13.8% from 2.71 billion in the prior-year quarter. Besides POP, the other codes for consumer payments posted the strongest growth rates. WEB, the code for Internet e-checks, recorded 342 million transactions, up 30.7% from 261.6 million in 2005's third quarter. TEL, the telephone-based payment code, grew 20.3% to post 74.3 million transactions compared with 61.8 million in the prior-year period. And ARC, the accounts receivable conversion code that lets billers convert checks they receive at lockboxes into e-checks, grew 26.6% to 547.1 million items from 432 million in 2005's third quarter.