Faster Payments And B2B Propel a Big Year for the ACH As Dollar Volume Tops $72 Trillion

The pandemic has “fast-tracked” adoption of the automated clearing house network for business-to-business payments, while transactions cleared and settled through the network on the same day they’re initiated are booming, according to full-year 2021 numbers released Thursday by Nacha, the governing body for the nationwide network.

The annual results complement the network’s fourth-quarter performance, which relied heavily on booming B2B and health-care transactions as well as on bigger volumes for the ACH’s faster-payments service. Nacha released those numbers last month.

All told, the ACH handled 29.1 billion transactions last year, up 8.7% from 2020. Dollar volume totaled $72.6 trillion, up fully 17.4%. “Throughout 2021, as the accelerated shift from paper to electronic payments continued, the ACH Network proved its resiliency and value to the nation. The figures for the year bear that out,” said Jane Larimer, president and chief executive of Nacha, in a statement. By contrast, Visa, the world’s largest card network, processed 164.7 billion transactions last year worth $10.4 trillion.

The biggest gainers on the ACH last year were peer-to-peer transactions, up 24.6% to 271.2 million payments, and B2B, up 20.4% to 5.3 billion transactions. Health-care payments followed closely with a 17.9% rise year-over-year, to 426.3 million

But the network’s relatively new same-day payments category also enjoyed a banner year, continuing a booming growth trend that began with the introduction of the faster-payments service in 2016. These payments totaled 603.8 million for the year, worth $943.7 billion, representing increases of 73.9% and 105.1%, respectively. The same-day category represents both credits and debits, with debits claiming 55% of the transactions but 42% of the dollar value. Looked at another way, the same-day service processed 2.4 million payments daily last year worth $3.7 billion.

Same-day ACH is expected to acquire even more momentum in March when a new rule extending the per-payment cap to $1 million will take effect, a 10-fold increase from the current limit. The move was requested by banks and is one Nacha expects will widen the usefulness of the service. While The Clearing House Payments Co. LLC has operated a real-time payment service since 2017, and the Federal Reserve is building one that is expected to begin operations next year, “[s]ame Day ACH is continuing to meet America’s faster-payment needs,” said Larimer in her statement on the latest results.

The decision to raise the same-day limit follows other moves Nacha has made recently to facilitate same-day ACH. In March last year, the network added a new settlement window at the end of the processing day to extend the time in which banks can handle same-day items. As a result, the latest daily deadline for same-day ACH has moved to 4:45 p.m. Eastern Time, two hours later than the former cut-off. The move in part was a response to banks in the Pacific time zone that now have more leeway to enter same-day volume.