Annual ACH payment volume has doubled in the last 5 years, spurred by growth across all transaction categories and newer applications used primarily to collect consumers' bill payments.

"Financial institutions provide tremendous value to their customers through electronic payment products and services," said Steve Ellis, Chairman of NACHA 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. The number of these payments was 12.98 billion, a jump of more than 1.9 billion over 2004, and valued at $27.9 trillion. The remainder were originated by the Federal government - 976 million ACH payments in 2005, up 2.6 percent, and valued at $3.2 trillion.

ACH payments include Direct Deposit of payroll, Social Security benefits and tax refunds, Direct Payment of consumer bills, e-checks, business-to-business payments, and Federal tax withholdings.

Consumer Payments

American consumers use the ACH Network primarily to pay bills automatically and electronically, and to receive income and benefit payments via Direct Deposit. NACHA estimates that 6.5 - 7.0 billion 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 (ARC) 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 financial institutions' ACH transaction growth in 2005.

Internet-initiated ACH payments (WEB) grew by 38.9 percent to 1.34 billion. NACHA estimates that 80 percent of these payments are to pay bills via companies' or billing services' web sites, 18 percent are to transfer funds.

The number pre-authorized, automatic bill payments - known as Direct Payment - increased by 5.3 percent to 3.1 billion payments.

Direct Deposit is still the most widely used ACH payment. The number of Direct Deposits in 2005 increased by 5.1 percent to more than 4.4 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 average dollar amount of a Direct Deposit was $1,290.

NACHA estimates that more than 71 percent of the private-sector workforce in the U.S. uses Direct Deposit to get paid, and as many as 145 million Americans use Direct Deposit for their pay or government benefits.

Business Payments

American businesses and governments use the ACH Network for payments to and from trading partners, vendor payments, business-to-government tax withholdings, intra-company cash management transfers, and to exchange remittance information regarding payments.

The total number of business-to-business ACH payments grew to 2.0 billion in 2005, up 11.3 percent over 2004. Financial electronic data interchange - the electronic exchange of payment-related information or financial-related documents in standard formats between business partners on the ACH Network - grew by 19.8 percent in 2005. In 2005 there were 915 million EDI-formatted remittance records accompanying ACH payments. The number of financial EDI payments in 2005 was 255.6 million, up 20.3 percent over 2004.