2001 ACH Payment Volume Exceeded 1 Billion

F or the first time, the volume of annual transactions on the Automated Clearing House (ACH) Network has surpassed one billion payments in one year. NACHA-The Electronic Payments Association released the 2001 figures during its Payments 2002 conference in April.

ACH payments increased 16.2 percent from 2000 and totaled 7.99 billion payments. The value of these payments was $22.2 trillion, reflecting an increase of 9.2 percent. The volume of payments is expected to double by 2006.

ACH payments include direct deposit of payroll, Social Security benefits and tax refunds, direct payment of consumer bills, business-to-business payments, federal tax payments and, increasingly, e-check and e-commerce payments.

Commercial use of ACH payments rose 17.4 percent, from 6.03 billion in 2000 to 7.08 billion in 2001. Inter-bank ACH payments increased by 17.6 percent, from 4.36 billion to 5.13 billion. "On-Us" transactions - payments that remain within a single financial institution - grew by 16.9 percent, from 1.67 billion in 2000 to 1.96 billion in 2001.

The federal government's ACH volume rose 7.4 percent in 2001, increasing from 848 million to 910 million payments.

Approximately 115 million people nationwide rely on direct deposit to receive their pay or government benefits. The number of direct deposits in 2001 increased by 11.6 percent over 2000, from 3.3 billion to 3.7 billion payments.

Direct deposit is used for payroll, expense and travel reimbursement, pension and annuity payments, interest payments, retirement and mutual fund distributions, Social Security, veterans' and other government benefits, and tax refunds. The value of these direct deposits was more than $4 trillion, with an average of $1,110 per direct deposit. Excluding federal government payments, the average direct deposit was $1,195.

Direct payments totaled 2.6 billion in 2001, a 17.6 percent increase over 2000. A direct payment is a pre-authorized debit that uses the ACH Network and is typically used for recurring bills such as mortgages, loans, utilities, investments and charitable contributions. The value of these payments was $1.6 trillion, with the average being $631.

More than 200 million e-check payments were made in 2001. An e-check is an electronic debit to a consumer's checking account that is initiated at the point-of-sale, on the Internet, over the telephone, or via a bill remittance sent through the mail, and is processed using the ACH Network.

In 2001 there were 88.7 million e-checks originated at the point-of-sale, 74.6 million originated on the Internet, and 8.7 million originated via the telephone. Millions of other e-check payments were originated during pilot projects for both telephone and remittance payments.

"Retailers and billers are beginning to take advantage of the savings and efficiencies inherent in electronic payment processing by converting paper checks into e-checks," said NACHA President/CEO Elliott McEntee.

In addition, NACHA statistics also show that 23.2 million re-presented check entries were processed through the ACH Network. A re-presented check entry is a returned consumer check that is re-presented for payment electronically rather than through the paper check collection system.