More than 12 billion automated clearing house (ACH) payments were made in the US in 2004, a 20% increase from 2003 which is mainly due to the rapid uptake of e-cheques, according to statistics released by industry association Nacha.
Nacha says the growth in ACH payments was driven by the rapid expansion of accounts receivable cheque conversion (ARC), which experienced a nearly six-fold increase in volume to more than 1.25 billion payments.
Annual ARC volume grew by more than one billion payments and accounted for 54% of all ACH transaction growth in 2004.
Nacha says Internet-based ACH payments represented a second area of growth last year, with consumers initiating 967 million ACH debit payments via the Web valued at over $300 billion - a 40.4% increase over 2003. Nacha estimates that 80% of online debits are to pay bills, 18% are to transfer funds, and one per cent are to make purchases.
In addition, Americans initiated 115 million ACH credit payments, valued at $47.8 billion, via banks' or billers' Web sites. Combining these two methods shows that US consumers used the Internet to initiate more than one billion ACH payments valued at $350 billion.
Steve Ellis, chairman of Nacha, says: "Banks themselves are the largest users of ARC and Web payments to collect bill payments, such as credit cards, mortgages, and other loans, from their customers ... This provides the banking industry with a double benefit - replacing cheques with electronic payments and improving the collection of their own receivables."
Overall US banks originated 11.06 billion ACH payments in 2004, 21.6% more than in 2003 and the industry's best performance since 1991 when direct deposits were first promoted. The value of bank originated payments last year was $25.5 trillion. The remainder of ACH payments were originated by the Federal government - 952 million ACH payments in 2004, up three per cent and valued at $3.1 trillion.
Direct deposits, which are used for payroll, pension and interest payments, increased by 5.3% to more than 4.2 billion payments in 2004. The number of direct payments - pre authorised debits - increased by 6.7% to three billion in 2004.
Financial electronic data interchange (EDI) on the ACH Network grew by 21.6% in 2004 and more than 764 million EDI-formatted remittance records were exchange over the network.
The number of EDI payments was 213 million in 2004, up 17.1% over 2003.
The total number of business-to-business ACH payments grew to 1.8 billion in 2004, up 8.9% over 2003. These transactions include payments among trading partners, intra-company cash management transfers, government vendor payments, as well as business-to-government tax withholdings. The value of these payments was $19.9 trillion, accounting for 69% of all ACH payment dollars.