Stats Show Bill Payments Remain the Star of E-Checks on the ACH

Internet bill payments were the lone stars of electronic checks in the first quarter, a quarter that saw volumes on all other e-check applications either decline or barely rise from fourth-quarter 2008 levels. Most e-check codes also declined on a year-over-year basis, according to the latest automated clearing house volume report from the ACH network's overseer, NACHA?The Electronic Payments Association. Seasonal factors and the weak economy undoubtedly affected ACH volumes in the first quarter, but the continuing secular trend of consumers writing fewer paper checks likely had an equal or greater effect. WEB, the code for Internet payments, is one of the two e-check codes whose transactions don't originate with paper checks, and it continued to grow in the first quarter after a strong 2008. WEB had 565.2 million transactions in the three months ending March 31, up 2.4% from 552.1 million in the fourth quarter and ahead by 13.5% from 497.9 million transactions in 2008's first quarter. The vast majority of WEB's volume comes from electronic bill-pay, a form of payment getting a strong push from billers, banks, and processors. In all of 2008, WEB posted 2.08 billion transactions, up nearly 20% from 2007. The newest e-check format, back-office conversion, or BOC, saw first-quarter volumes decline 15.1% to 33.4 million transactions from 39.4 million in the fourth quarter. BOC, however, was still up by 812% from a small base of 3.67 million transactions a year earlier as retailers and processors rolled it out. Introduced in March 2007, BOC allows merchants to scan checks in their own back offices or those of processors. BOC's older, close cousin, POP, for point-of-purchase, fell by 11.6% in the first quarter to 109.2 million transactions from 123.6 million in the fourth quarter. That POP would drop sequentially is no surprise because of heavy holiday spending, but first-quarter volumes were still off 5.2% from 115.3 million transactions in 2008's first quarter. Until recently, POP had seen strong growth as some national and regional retailers, notably Wal-Mart Stores Inc., rolled it out (Digital Transactions News, Sept. 13, 2006). Another once-hot e-check form, accounts-receivable conversion, or ARC, the code for lock-box check conversions, continued a cool-down that started last year. ARC remains the biggest e-check code by volume, with 638.6 million transactions in the first quarter, but volume was off 2.2% from 653.2 million transactions in the fourth quarter and by 9.3% from 703.8 million transactions in 2008's first quarter. TEL, the code for telephone-based ACH payments, rose by 0.5% to 85.8 million transactions in the first quarter from the preceding quarter's 85.4 million, but fell by 3.6% from 89 million transactions in 2008's first quarter. In all, the ACH posted 3.78 billion transactions in the first quarter, off 0.7% from 3.80 billion in the fourth quarter but up 1.9% from 3.71 billion a year earlier. Volumes exclude on-us transactions.