The Automated Clearing House or ACH network saw a dramatic rise in its quarterly volume. Nacha, the group that runs the ACH network, reports that the network saw 7.1 billion payments during the first quarter of 2021. The total equals about 2.7 billion payments per month. The quarterly report is an 11.2 percent increase over the same quarter from 2020.
Nacha also reports the payments received by the ACH network during the first quarter of 2021 totaled about $17.3 trillion in value. The total is close to 19 percent higher than what it had in the first quarter of 2020.
Nacha cites this statistic as proof that the ACH network is strong and can handle various stresses. People are using the ACH network more often than ever. Even after accepting one of the most massive government stimulus programs in the country’s history, the system is still capable of handling all these transactions.
What Contributed To This Increase?
Nacha states that the United States’ direct deposit stimulus payments to qualifying taxpayers helped boost the ACH network’s volume. The government sent more than 125 million stimulus payments to Americans as of the end of March. These payments total about $325 billion in value. Most of these checks went direct to peoples’ bank accounts through a direct deposit service.
There were concerns that the direct deposit payments would be hard for the network to facilitate. Most people who had been expecting these stimulus payments got what they were looking for without waiting long.
Not every person got their payments at the times they expected. It took a while for the transactions to move, but most people have reported that they have gotten their funds as of April 2021. Some people got their payments in about a week after they were announced. The extended effort by the government to move hundreds of billions of dollars out was extensive, but it was successful enough to facilitate the needs many people held.
Businesses are also moving away from traditional check-based payments for B2B transactions. They are focusing more on ACH payments, as they are more convenient than giving other businesses checks. Businesses can move payments to other businesses’ checking or banking accounts through ACH transactions. Nacha reports that B2B ACH payments increased by nearly 17 percent from the first quarter of 2020. About 1.2 billion B2B payments took place in the first quarter of 2021.
People are relying on ACH payments for healthcare transactions. Nacha reports that people spent 9 percent more on healthcare payments through the ACH network this past quarter than the year before. People are especially using these payments to facilitate exams, treatments, and other services that people often require for their health needs.
Businesses are also accepting ACH payments for purchases more than ever. Nacha states that spending on online purchases went up about 14 percent in the first quarter. People are spending more than $2 billion on online transactions.
The Rise of Same-Day ACH Payments
Same-day ACH payments have also become popular to where businesses are transferring more than $1 trillion between businesses in a quarter. Same-day payments have become increasingly critical as companies look to get their funds ready sooner.
Nacha is also planning to increase the per-payment limit on same-day ACH payments to $1 million in early 2022. The effort will meet the expanding needs businesses have for handling ACH payments. The same-day service has only been around for the past couple of years, so the team will still be refining the work as it moves forward.
Nacha is short for the National Automated Clearing House Association. The group has been working its hardest to manage the ACH network and to ensure it keeps running well. Nacha’s ACH network helps manage direct deposits and payments between businesses and other parties. It can handle payments to people and even other businesses. The system supports all American bank and credit union accounts.
Nacha is fully functional and will continue to maintain its operations well without risking losses. The group gets its funds from the banks and credit unions it governs. The fees it collects for transactions also helps keep it running.
How Does the ACH Work?
The way how the ACH works is part of what makes the system so effective. The ACH system allows a person to provide one’s bank or credit union name, account type, routing number, and account network to the network. A business or other party can then send a signal to transfer funds from one’s account to that other person’s account. The all-electronic process ensures money can go between parties in moments.
The ACH setup ensures people can keep track of their transactions in moments. It is easy for senders to keep tabs on their expenses. Senders can also save the data they collect and send regular payments to people as necessary, including every week or month if necessary.
The ACH process is also cheaper to manage than if one were to wire funds to someone. The ACH network has also improved its infrastructure to ensure payments can go forward faster. Same-day payments have been working since 2016, and they are becoming increasingly common and less expensive as the technology becomes more refined.
Nacha continues to review its standards for handling direct payments. It reviews ongoing trends surrounding how people use clearing house payments and adjusts the rules and infrastructure for what users need the most. The work is about ensuring people can get the support they deserve.
It likely won’t be long before these new records break once more. People are using ACH payments more than ever, as they are convenient and easy to plan. The network’s system for managing funds will especially do well in ensuring more payments can run well. It will be exciting for people to see what the ACH network goes next and how Nacha will continue to keep the system operational.