As Online Bill Pay Surges, WEB Closes Gap with E-Check Leader ARC

Paper-based bill payments continued their decline in the third quarter while Internet bill payments gained more ground, according to the latest automated clearing house data. The accounts receivable conversion (ARC) code for paper checks sent to billers' lockboxes and then converted into electronic checks had 583.8 million transactions in the third quarter, down 10.5% from 652.5 million year earlier, according to the latest quarterly report from NACHA?The Electronic Payments Association, governing body of ACH. In contrast, transactions with the WEB e-check code, which is mostly ACH Internet bill payments, totaled 562.6 million, up 7.6% from 522.9 million in 2008's third quarter. ARC long has been the transaction leader among NACHA's e-check applications, but WEB has been growing faster than ARC in recent quarters as consumers increasingly pay bills online instead of mailing checks. WEB's transaction volume is now 96% of ARC's, up from 94% in the second quarter and only 62% in 2005 (Digital Transactions News, Aug. 21). That means WEB's volume will almost certainly surpass ARC's in 2010. Meanwhile, the brand-new IAT code for international ACH payments had 303,802 transactions in the third quarter. IAT only went live on Sept. 18 and had just nine processing days of transaction volume in the period (Digital Transactions News, Dec. 8). Based on early volumes, Herndon, Va.-based NACHA is projecting annualized IAT volume of 8.5 million transactions. Back-office conversion (BOC), the 2 ½-year-old e-check code that enables retailers to convert customers' paper checks in their back offices or at processor facilities, posted 41.3 million transactions in the third quarter, up 56.5% from 26.4 million a year earlier. Point-of-purchase (POP), an older retail e-check option notably embraced by Wal-Mart Stores Inc., logged 120.2 million transactions, up 2.3% from 117.5 million in the 2008 period. Volume on TEL, the e-check option for telephone-based ACH payments, was nearly unchanged at 86.3 million transactions in the third quarter compared with 86.2 million a year earlier. The ACH network had 3.77 billion total transactions in the third quarter, excluding on-us items, up 1.6% from 3.71 billion transactions in the year-earlier period.