The Millions, Billions And Trillions Of Same Day ACH

How fast is fast enough? And how fast will people get used to fast — as in faster payments? Turns out quick is not just for Amazon deliveries or upload speeds. NACHA, with its Same Day ACH offering, is leading the charge for faster payments in the U.S., and our latest Data Drivers, featuring PYMNTS’ Karen Webster and NACHA CEO Jan Estep, explored the possibilities.

Data Point One: 25 Billion And $43 Trillion

We’ll give a daily double for the first data point, as it’s number of ACH transactions, and the second is quoted in terms of dollars over the whole calendar year of 2016. That year “as a whole,” said Estep, “showed both the continued growth as well as the evolution of the ACH network.”

The network has evolved to offer a set of different payment options; most notably, it “allows next-day payments, value-dated payments and now same-day payments.”

The system is, of course, also ubiquitous, reaching 100 percent of all bank accounts in the United States, across credits and debits, business and consumer and domestic and international transactions — which means now, nearly all of these different payments types can also be made same day or will be available with that level of functionality, said Estep.

The average value over the whole year, she continued, has been a bit over $2,100 per transaction. “So it does reflect a little bit of the makeup of the network and [its] versatility. For instance,” Estep said, “let’s take business to business payments. They grew over 5 percent in 2016.”

But even more notably here, she told Webster, the addenda records accompanying those payments grew 8 percent, indicating that not only did transactions grow, but information considered valuable also gained favor. “The surety, the safety and the certainty of the network are also key features,” she maintained.

Data Point Two: 26 Million

This is the number of Same Day ACH transactions that flowed over the ACH network since launch in late September of 2016. Estep noted that the industry saw the debut of Same Day ACH in September of last year, with now only two full quarters of year-over-year transactions to use as yardsticks for growth. Volume advances remained impressive as measured consecutively, as volume grew 13 percent from the fourth quarter 2016 to the first quarter of 2017.

“It really does represent a blend,” said Estep of that growth, “against all of the different payment types.” One-third of the Same Day ACH transactions were B2B, and 53 percent were direct deposit, business-to-consumer payments stretching across payroll or business refunds.

Another 13 percent were P2P transactions, and the relatively smaller remainder stood out as consumer bill payments. Consumer bill payments on same-day basis have the benefit of risk mitigation, as funds accrue with haste to the biller, and, as Estep noted, services don’t get cut off to the customer.

Some surprises in the mix, said Estep, came as “about a third of the normal, classic ACH is that direct deposit business-to-consumer payments. When we look at same day, it is over half. So there is a pretty big shift there.”

Two larger trends are afoot, said Estep. From a business standpoint, early adopters are looking at Same Day ACH as a “differentiation tool, looking for ways that they can better please their customers with things like same day refunds … It’s also a great operational backstop. If things go wrong, you can use those Same Day ACH rails to make sure” customer and employee needs are met. For financial institutions, she continued, access to the ACH network and Same Day ACH means they can package services to benefit businesses and consumers to embrace payments in the fashion they desire.

Across the ACH network, internet-initiated transactions — commonly known as “web debit,” as Estep termed them — increased by 13 percent, but internet-initiated credit payments increased by 38 percent. Those transactions, she said, “are just as safe on the ACH network” as other transactions, and a new value proposition comes out with the Same Day ACH proposition.

Fraud? Yes, it is on the minds of many, and the rule of thumb may be “faster payments, faster fraud,” but the groundswell in ACH payments has not brought with it a new wave of fraud with speed. Banks and other stakeholders have been well-educated and prepared for new Same Day ACH adoption. As a matter of fact, 100 percent of financial institutions surveyed have not seen any boost in fraud.

Data Point Three: 92 Percent

This is the percentage of FIs who are onboard and ready to originate Same Day ACH debit when that capability becomes available in September. This is a new stat, said Estep, who noted the number was uncovered as part of a new survey conducted by NACHA. A full 100 percent of all FIs surveyed will be able to receive Same Day ACH debits, said Estep. “That is just like it was for ACH credit,” she mused.