NACHA Says Red-Hot ARC Activity Drives Overall ACH Growth

The process of converting paper checks consumers send to billers into electronic transactions is driving much of the growth of the automated clearing house, according to ACH statistics for 2004 released today. Accounts-receivable conversion, or ARC, transactions increased by more than 1 billion last year, accounting for 54% of the growth of the ACH, according to numbers from the National Automated Clearing House Association, Herndon, Va. The 3-year-old ARC application, which allows billers to convert checks sent by consumers to central lockboxes, has over the past year has become the hottest form of electronic check available on the ACH, reaching the 1-billion-transaction mark sooner than any payment form in the history of the ACH, which was formed in 1972. NACHA says another form of e-check often used for bill payment, that for transactions consumers perform on the Internet, grew 40% last year to 967 million transactions. The rules-making body for the ACH estimates that 80% of these WEB transactions occurred to pay bills on the sites of billing companies or those of billing services. Another 18%, NACHA says, were used to transfer funds online, while the remaining 1% went toward buying goods. In addition to these electronic debits on the Internet, NACHA says consumers used the Web to initiate another 115 million credit payments, or transactions in which they instructed their banks to pay other parties electronically. NACHA reported overall that transactions on the ACH grew 20% in 2004 to more than 12 billion.