Faster payments on the nation’s automated clearing house network reached a milestone in the fourth quarter, with each business day recording at least 1 million same-day transactions for the first time since same-day service was introduced, according to data released Wednesday by Nacha, the governing body for the ACH.
“We’re delighted to see the growing acceptance of same-day ACH among businesses and consumers,” said Jane Larimer, Nacha’s president and chief executive, in a statement.
Specifically, the quarter notched 71.3 million same-day transactions, up 39% over 51.3 million payments in the same period in 2018. The fourth-quarter volume was composed of 41.3 million credits and 30 million debits. Same-day ACH enables settlement of transactions the same day they are initiated, rather than the next business day, as is typically the case with traditional ACH processing. Same-day credits were launched in September 2016, with same-day debits following a year later.
Credits allow users to push payments from their bank accounts to those of their payees. Debits enable businesses, such as billers, to pull funds from customers’ accounts.
Nacha expects same-day payment activity to grow even more active next year as the result of the network’s move to add a third, and later, daily processing window. That later deadline for entering same-day transactions will enable institutions on the West Coast, for example, to process volume that otherwise had to wait until the next day. The rule change, which will take effect in March next year, sets the latest daily deadline at 4:45 p.m., two hours later than the current cut-off. The third window became official when the Federal Reserve announced in December it would support the move.
All told, fourth-quarter volume for the ACH totaled 6.4 billion transactions, up 8.1% year-over-year, Nacha reported. That performance continues a recent streak in which the ACH has logged a better than 5% growth rate each quarter. Total dollar volume came to $14.7 trillion, a 10.6% increase from the same quarter in 2018. “With this impressive performance in the fourth quarter, it’s evident that the modern ACH network is thriving,” said Larimer, who took over as head of Nacha last year.
Business-to-business, health-care, Internet, and peer-to-peer transactions all grew at double-digit year-over-year rates in the quarter. Internet traffic, indeed, increased 14.3% to 1.8 billion payments, equaling direct deposits and exceeding B2B volume, which totaled 1 billion.