With second quarter behind us, we are now beginning to get an understanding of the health of the payments industry and the initial impact of the global pandemic as banks, processors, and networks begin to report earnings and associated payment activity. Nacha just released its second quarter activity results, giving us insight into ACH. Here’s a summary of some of the key points from their press release. The full press release can be read here.
- There were 6.6 billion payments made on the ACH Network during the quarter, reflecting a 7.9% increase over the same period in 2019. The value of those payments was $14.7 trillion.
- Direct Deposit – up 12% over Q1; and 17% over a year ago
- WEB debit volume is up 15.8% – Consistent with “flight to electronic payments” and the use of online/remote payments
- Check conversion decline of 23.8% – Consistent with flight from checks in all scenarios/use cases
The double-digit direct deposit number is notable since payrolls were way down, but Federal and State benefits like the Economic Impact Payments (EIP), which totaled 114 million transactions and $197 billion through mid-May alone, contributed to that growth, along with the millions of state unemployment and other assistance payments.
The WEB debit volume is up as consumers go digital for purchases and for paying bills. The check conversion is a really interesting number. This means that consumers are using checks less at the point of sale, less for paying bills, and businesses are finding better means of making payments, too, as access to the office and the company checkbook becomes an issue. I suspect that many of these transactions which start off as check transactions do not return once they have been completed electronically.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group