SAN DIEGO - Nearly 14 billion automated clearing house payments were made in 2005, a 16.2 percent increase from 2004, according to statistics compiled by NACHA-The Electronic Payments Association.
According to a news release, annual ACH-payment volume has doubled in the last five years, spurred by growth across all transaction categories and newer applications used primarily to collect consumers' bill payments. ACH payments include payroll direct deposit, Social Security benefits and tax refunds, direct payment of consumer bills, e-checks, business-to-business payments, and federal tax withholdings.
"Financial institutions provide tremendous value to their customers through electronic payment products and services," said Steve Ellis, NACHA's chairman and executive vice president of Wells Fargo & Company's Wholesale Banking Group. "The rapid growth of the ACH Network is tangible proof of the value that financial institutions and their customers experience from ACH payments."
The nation's financial institutions originated 17.4 percent more ACH payments in 2005 than in 2004. Those payments totaled 12.98 billion, a jump of more than 1.9 billion from 2004. The rest of the year's payments originated from the federal government – 976 million, up 2.6 percent from 2004.
NACHA estimates that between 6.5 billion and 7 billion U.S. consumer bills were collected via the ACH Network in 2005, including pre-authorized debits, Internet and telephone payments, and checks converted into ACH payments. Annual volume for accounts-receivable check conversion grew by more than 900 million payments to more than 2.15 billion, an increase of 60 percent. ARC accounted for 47 percent of FIs' ACH transaction growth in 2005.
Internet-initiated ACH payments grew by 38.9 percent to 1.34 billion. NACHA estimates that 80 percent of those payments were made to pay bills while 18 percent were funds transfers.
Direct deposit is still the most widely used ACH payment. The number of direct deposits in 2005 increased 5.1 percent to more than 4.4 billion payments.
