The number of ACH transactions that were conducted in 2010 rose 3.4%, to 19.4 billion, Nacha, the electronic payments association, reported Monday. That compares with a 2.6% increase in volume in 2009. The dollar volume that was moved over the network last year was $31.7 trillion.
Though Nacha expected transaction volume in 2010 to surpass that of 2009, this increase reinforces the idea that the ACH network is continuing to find new avenues for growth, Janet Estep, the president and chief executive of Nacha, said in an interview here Sunday before the start of the Herndon, Va., group's Payments 2011 conference.
"The ACH network is there for any player to use, and that means that it is there for financial institutions to use to … make services available to their customers, both … consumers as well as businesses," Estep said.
Programs like Secure Vault Payments, the Electronic Billing Information Delivery Service and other initiatives by Nacha, which oversees ACH operating rules, could continue mitigating declines in transaction categories that once were major sources of growth, such as check conversion.
The proliferation of mobile payment services, including those that allow a consumer to make purchases and schedule payments on a mobile device and those that use the device as a card replacement, could also be a boon for the network.
To position the ACH network to play a role in mobile payments, Nacha's members in May approved a rule expanding the definition of the WEB transaction category, which pertains to consumer payments authorized over the Internet, to include debits initiated over a wireless network. The rule change, meant to give banks more clarity over how to classify transactions originated on a mobile Web browser or dedicated application, took effect in January.
That change is just one of several that Nacha has introduced or is planning to introduce in an effort to give banks more flexibility in how they can offer ACH services to customers, said Mike Herd, the managing director of ACH network rules at Nacha, in an interview Sunday.
For example, in September new rules will take effect that allow businesses to set up recurring ACH payments using the TEL entry code, for payments that consumers initiate by telephone. Currently the TEL category can only be used for one-time payments.
Improved economic conditions and rising comfort levels with electronic transactions among consumers helped ACH volume rise last year, Estep said. Increases in individual categories provided further insight into spending trends, she said.
Nacha reported a 15.6% jump in the number of consumer-initiated entry, or CIE, transactions, which reached 137.8 million, in 2010.
Estep ties this increase to the expansion of Electronic Billing Information Delivery Service, or EBIDS. The service, which is commercially available after a multi-year pilot, lets companies, such as utilities and carriers, send bills directly to their customers' bank websites over the ACH network. Consumers receive the bills as a message on their bank's website.
That is "just too much of an increase to say there isn't a direct correlation," she said.
Such services have also helped contribute to more "native electronic payments," or those that are initiated as an ACH transaction from the start rather than being converted from a check, Estep said.
Electronic billing services have helped contribute to Wells Fargo & Co.'s ACH volume, said Laura Lee Orcutt, a senior vice president and electronic payments group product manager at the San Francisco bank.
