Transaction Growth Perks up for the ACH As Online Bill Payments Continue to Climb

The automated clearing house network’s transaction count grew by 4% in the second quarter compared to the same period in 2011, according to the latest figures from NACHA, the regulatory body for the network. Transactions totaled 4.15 billion, worth approximately $9.1 trillion in value, according to the NACHA statistics. Transactions reported by NACHA do not include so-called on-us volume, or traffic between institutions that does not pass through switches at the two network operators.

This is significantly faster year-over-year growth for the ACH than in the same quarter for 2011 and 2010, when the network posted transaction growth rates of 2.7% and 1.5%, respectively. It follows a similarly robust first quarter, when the ACH grew 4.4% versus the corresponding 2011 period.

The fastest-growing transaction application is IAT, a relatively new code that covers international activity. IAT transactions totaled 10.83 million, up fully 51% from the second quarter of 2011. Among the ACH e-check codes, the volume champ continues to be WEB, a category for bill payments to online billers as well as mobile payments using the ACH. WEB payments totaled 718.4 million, up 9.3% year-over-year. WEB dipped slightly from the first quarter, when its volume totaled 722.3 million.

E-checks refer to conversion of paper checks to electronic formats. They also include categories like WEB in which consumers make payments that are electronic from the start. Only consumer payments are eligible to be processed as e-checks.

The second-largest e-check in volume continues to be the declining ARC application. Once a hot category, ARC has dwindled to 467.6 million quarterly transactions, down 6.3% from a year ago and 3.3% from the first quarter. The code refers to the conversion of paper checks consumers send to biller lockboxes. Much of its decline has come with the rapid rise of WEB and online bill payments through bank and other consolidator sites. All of this is activity that replaces checks with so-called native electronic payments, or transactions that start out as electronic payments.

Two other e-check applications, BOC and POP, also cover paper check conversion and saw mixed results in the quarter. POP, in which cashiers convert checks at the point of sale and hand the paper back to the customer, registered 117.3 million transactions, up 8% from the first quarter but down 7% from the second quarter last year. BOC, or back-office conversion, is a process in which a store bundles its checks at the end of the day and converts them in a “back office.” This code saw nearly 5% growth year-over-year to 48.6 million payments, but was up a slight 1% over the first quarter.

TEL, a code covering so-called telephone-initiated transactions, fell 6% from the second quarter last year to 84 million transactions. It is also down 4% from the first quarter.