NACHA reported fourth-quarter 2018 growth figures for ACH at rates not seen in over a decade. As DigitalTransactions reported, much of the growth came from the appeal of same-day ACH often used for last minute payroll transactions and payroll corrections, plus other use cases where a payment is needed within a day and meets the $25,000 per transaction threshold:
The massive network linking nearly all of the nation’s financial institutions tallied 5.97 billion transactions, up 8.7% from 5.49 billion a year earlier. It was the network’s fastest growth in 11 years, according to NACHA, the ACH’s governing body. Volume consisted of 3.5 billion debits and 2.4 billion credits.
Same-day ACH transactions—credits and debits combined—grew 46% year-over-year to 51.3 million from 35.2 million in 2017’s last quarter, Herndon, Va.-based NACHA reported this week
ACH also benefited from the industry growth in Person- to-Person (P2P) transactions which uses ACH to settle funds for some product types. Venmo, Square Cash and other P2P apps will transfer funds between users via ACH, unless the consumer wants faster transaction and is willing to pay for it:
Growing slightly faster are P2P payments, which in ACH terminology are dubbed WEB credits. Popular P2P services such as Venmo from PayPal Holdings Inc. and the bank-backed Zelle service generate ACH credits. Such transactions totaled 37.9 million in the fourth quarter, up 46.9% from 25.8 million a year earlier.
Seems like the venerable ACH platform continues to prove its relevance in a changing payments industry.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group