In a development that spotlights the continued growth of electronic banking transactions, U.S. banks initiated nearly a billion more automated clearing house payments last year than they did in the previous year.
And as consumers continue to adopt electronic payment techniques, Nacha, the electronic payments association, estimates that the annual ACH growth rate will remain in the double digits for at least the next five years.
Eliott McEntee, the president and chief executive of Nacha, said consumers are rapidly becoming more comfortable with seeing different types of electronic transactions on their bank statements and have begun to use a variety of digital payment methods. He credited the strong growth rate to both emerging methods and old standards.
"This is a combination of really high growth rates in new applications, such as electronic checks, and continuing growth in stable areas, such as direct deposit and direct payment," Mr. McEntee said.
Nacha reported that 8.94 billion ACH transactions took place last year, 11.9% more than in 2001. The 2002 total included 8.05 billion transactions initiated by banks and 893 million started by the federal government.
With nearly 858 million transactions, J.P. Morgan Chase & Co. was the largest ACH originator. More significantly, its volume increased even more sharply than the overall figure - 36% from its 2001 total.
"Achieving that kind of growth, and starting from those kinds of base numbers, is a phenomenal accomplishment," said Marcie Haitema, the president and CEO of JPMorgan ACH.
The gain was driven partly by the growth of existing services, but Ms. Haitema said the bigger increases came from customers adopting new services, especially Internet-based bill payments, telephone-initiated payments, and accounts receivable conversion, which involves converting paper checks into ACH transactions at the lockbox.
Some large billers are starting to embrace accounts receivable conversion, which goes by the Nacha acronym ARC. Ms. Haitema said Morgan Chase has landed several significant accounts from credit card issuers that have either started to use the process or have shifted their ARC business to the bank.
Mr. McEntee noted that the point of sale, the largest single payment avenue, is dominated by credit and debit cards and that ACH transactions are not well suited to make inroads there. However, he also said the format is increasingly becoming an important part of most other electronic transactions.
Bank One Corp., the No. 2 originator, also had significant ACH growth, though its gains more closely mirrored the industry's performance. Its transaction volume rose 15.8% from 2001, to 681 million.
Rounding out the top five were Wells Fargo & Co., whose ACH volume grew 1.8%; Wachovia Corp., which posted a 3% gain; and Bank of America Corp., whose volume slipped by 0.9%.
Len Heckwolf, the senior vice president for Bank One's consumer solutions group, cited new services, including Web banking payments and telephone-based transactions, as a driving factor in its volume increase. The product codes for those two types of transactions, WEB and TEL, were introduced in 2001.
There was also continued expansion in some of the most traditional ACH applications, such as direct debits and direct deposits, including payroll and other regularly recurring payments, Mr. Heckwolf said. That expansion reflected the overall shift from paper-based to digital payment technologies, he said.
"We are seeing general acceptance by consumers of electronic transactions, and ACH plays a big part in that," he said.
