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The growth of ACH and the decline of the check

Two sets of numbers were recently released by NACHA and the Fed, respectively: ACH transactions are up over 5 percent, and checks are declining by 2 percent. Neither of these are eye-popping numbers, but when taken together, they raise the question: What does this mean for credit unions?

First, a deeper dive into the growth of ACH: NACHA is a not-for-profit responsible for managing, governing and administering the ACH network. The most recent numbers from NACHA’s president, Janet Estep, claimed that ACH transaction volume rose 5.3 percent to 25.5 billion, representing a transfer of $43.7 trillion. While 5.4 percent growth sounds slightly anemic, a denominator in the billions takes a big numerator to move a few percentage points. And to complete the math, that’s an average transaction of $1,748. One of the growth factors cited by Estep was the introduction in September of same-day payments, which allowed ACH payments to be processed within one business day rather than the next day or the day after. Additionally, Estep provided that recently they have seen higher growth in internet-enabled ACH (such as paying with Venmo or paying your cell phone bill from your share draft account) than in pre-arranged payments (such as payroll direct deposit and company expense reimbursements).

Around the same time, the Fed’s annual report showed a decline in check usage of about 2 percent over the last year, about a 50 percent decline since 2000 when 42.5 billion checks were written. More interesting is that 95 percent of the decline is in checks under $500. Many businesses still rely on checks to pay vendors, but the under-$500 decline implies that consumer check usage is migrating to other forms: using a debit card at the supermarket, paying for utilities using bill pay, or, if you’re a millennial, “settling up” for a pizza party using the Venmo app. But something gets lost when moving from check to ACH. In the past, when a tenant paid the landlord by check, there was branding on the upper left of the check that was seen by both parties each month, almost like free advertising. That goes away with ACH.


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