The ACH And Debit Top the Growth Charts, According to the Latest Fed Study

Payments analysts looking for where the growth is can find it in the automated clearing house network and in debit cards. With respect to transaction volume, no U.S. payment system grew faster over the three years from 2018 to 2021 than the ACH, which posted a compound annual growth rate of 8.3% to reach 36.2 billion transactions in 2021.

Debit card payments of all kinds—including general-purpose and private-label prepaid cards and cards used in electronic-benefit transfer programs—clocked a 7% rate of growth over the same three-year period, totaling 106 billion payments in 2021. Though still a small number, transactions on EBT cards grew fully 22.2%.

That’s according to the latest release of the Federal Reserve’s Triennial Payments Study, which appeared Friday. The massive statistical effort, which the Fed has undertaken since 2001, includes estimates of checks written (a negative 8.3% three-year CAGR) and of ATM withdrawals (down 10.1%) as well as cards and ACH.

It’s the first such Fed study to include a full two-year period in which consumers and businesses struggled to contend with a pandemic that temporarily restricted in-store shopping, forced conversions to contactless payments, and drove the payments industry to depend increasingly on e-commerce.

For cards, the fastest three-year growth was posted by general-purpose prepaid cards, at 14.1% to reach 8.9 billion transactions. Private-label prepaid, on the other hand, posted a negative 2.5% growth rate to finish with 5.1 billion transactions in 2021. Non-prepaid debit hit a healthy 6.5% CAGR to reach 87.8 billion payments. Overall, debit cards of all kinds posted 106 billion transactions in 2021.

General-purpose credit cards hit 47.8 billion transactions, growing at a three-year CAGR of 5.3% through 2021. Private-label credit cards, however, continued a long-term swoon, dropping 4.9% over the three-year period to 3.3 billion transactions in 2021. The average ticket on credit cards of all kinds was $96 in 2021, up from $89 in 2018.

With the rise in digital-payment methods, ATM cash withdrawals are slumping “substantially,” according to a Fed release about its study. The total number of withdrawals in 2021 came to 3.7 billion, down from 5.1 billion in 2018, according to Fed estimates included in the study. That number had held steady more or less in the previous three-year window, 2015-2018.