To the Editor:

In response to your April 10 article, "ACH Transaction Volumes Grow, But Revenues Don't Keep the Pace," [page 1] First Union and the financial services industry as a whole have experienced significant consolidation over the past 10 years through increased merger and acquisition activity. As a result, rankings that do not take this consolidation into account do not provide an apples-to-apples - and therefore accurate - comparison of numbers.

Specifically, I believe American Banker's survey results are misleading because they do not include "on-us" transactions. As the article points out, overall growth of "on-us" payments rose by 47% from 1998 to 1999. By ignoring this activity, you severely underrepresent the true volume of ACH transactions.

As a result of First Union's merger with CoreStates in 1998, coupled with the overlap of some geographic territory between our two banks, a large amount of transactions we "originated" to CoreStates Financial Corp. in 1998 became "on-us" transactions in 1999. Therefore, our total volume, as reported by you, appeared to decrease from year to year.

Put another way, had we been permitted to include our on-us payments in the numbers provided for your ranking, our overall volume would have been nearly 20% higher. From 1998 to 1999 (including "on-us" payments for both years), our overall ACH volume increased by 5%.

I also would like to reassure you that the "decrease" you reported in our volume was in no way related to "challenges" or "client dissatisfaction" due to our merger with CoreStates.

By incorporating "on-us" payments into your annual rankings of ACH originations, you will paint a clearer picture of where our industry stands.

Nina Archer

Executive vice president, head of global cash management

First Union Corp.

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