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Fed Finds ACH Surpasses Checks In Corporate Payments

The Federal Reserve made news late last week when it released its newest data on consumer and business payment habits, assessed via data from 2015 compiled in 2016. According to Fed researchers, there were some significant changes in corporate payments activity between 2000 an 2015.

The report, published Friday (June 30), found businesses wrote an average of 24.1 checks a month in 2015, down from an average of 66 per month in 2000. Meanwhile, ACH payments increased, with businesses sending an average of 29.8 online payments a month using this rail, up from 13.4 in 2000.

The value of corporate payments has also significantly risen since 2000, the Fed found. According to the report, the value of ACH transfers and checks combined reached $148.5 trillion in 2015 – more than double the value in 2000.

For both consumers and businesses, the volume of non-cash payments jumped over the 15 year period. Online ACH payments became most common for businesses, followed by checks, general-purpose credit cards, and non-prepaid debit cards (for consumers, non-prepaid debit cards were the most common non-cash payment vehicle).

The report follows early analysis released by the Federal Reserve last December. This year the Fed said it plans to release analysis on fraud to identify trends in fraud based on payment type. Further, the Fed is currently collecting data on non-cash payments made during 2016 with plans to provide annual updates in trends, currently published every three years. That report is also expected to be released later this year.

The Fed’s analysis supports separate research conducted by NACHA that also found increases in ACH faster payments among corporate payers. But while the Fed’s report suggested ACH is now the most common payment rail among corporates it surveyed, NACHA’s report found paper checks continue to account for half of corporate payments, with ACH making up about a third. NACHA’s report, which surveyed accounts receivables professionals, only examines how businesses pay their suppliers. AR executives surveyed said they expect ACH faster payments to overtake checks as the most popular way they get paid by their clients by the end of the decade.

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