NACHA Reports Nearly 5% Volume Growth for the ACH Network in 2014

On the heels of healthy quarterly growth, NACHA reported Thursday that the automated clearing house network handled nearly 23 billion electronic transactions in 2014, up by 1 billion payments, or nearly 5%, from 2013. Dollar volume was up more than 3%, to more than $40 trillion.

These overall volume numbers include network traffic as well as on-us and direct-send activity reported to NACHA, the regulatory body for the ACH system.

NACHA also reported that what it calls native electronic payments totaled 16 billion in 2014. Growth in these transactions, 6.3% last year, means that they now account for fully 90% of networked volume (volume excluding on-us and direct-send transactions). Native electronic payments are transactions that begin and end in electronic formats. By contrast, check conversions for example begin with paper checks.

The ACH’s growth comes as the network works toward same-day settlement, a capability that would speed up clearing time from the current next-day regime.

“The ACH network has continually added capabilities over  its history to enable a host of electronic payments, such as payroll, bill payments, business payments, online and mobile payments, international payments, and a variety of others,” said Janet O. Estep, president and chief executive of Herndon, Va.-based NACHA, in a statement. “New initiatives will help us continue to provide new, efficient options for ACH network users.”

The network’s application for online and mobile transactions, WEB, saw particularly robust growth last year, increasing 10.2% to 3.6 billion transactions (excluding on-us and direct-send volume). These included 7.4 million WEB credits used for person-to-person transfers. New rules adopted a year ago allow NACHA to identify P2P payments under the WEB code. Altogether, WEB activity now totals nearly one-fifth of network volume.

“Clearly, the trend is moving towards more and more online and mobile payments,” Estep said. “Continued development and implementation of rules that support the changing needs of the industry will help ensure financial institutions remain at the center of payments and continue to meet the needs of today’s and tomorrow’s consumers.”

E-check codes that rely on check conversion saw declines along with the general drop in check usage. POP volume, for example, fell 12%, to 358.4 million transactions for the year. With POP, cashiers convert checks at the cash register to ACH format. ARC, an application that lets billers convert checks collected in lockboxes, continued a long downward trend, dropping 8.3% to 1.57 billion items.

The network’s largest originator last year was Wells Fargo & Co., with a total of 4.1 billion debits and credits, up 8.4% over 2013. The largest receiving institution was Bank of America Corp., with 1.78 billion items, a 3.4% increase.

Fraud on the network, as measured by the unauthorized debit return rate, amounted to 0.028% in 2014, or fewer than three out of every 10,000 transactions, NACHA said. NACHA last year levied fines in 148 instances, totaling $369,000.