NACHA, the governing body of the Automated Clearinghouse (ACH), released third quarter figures this week on the use of ACH processing. We’re not the least bit surprised that ACH popularity continues to significantly increase, and we’re frankly thrilled more and more merchants are taking advantage of same-day ACH.
Among the highlights:
- ACH usage grew 6.7 percent in Q3 – totaling $5.6 billion in payments.
- $2.3 billion in credit transactions
- $3.3 billion in debit transactions
- Compared to Q3 2017, ACH payments increased 192 percent. There were 43.2 million ACH transactions made in Q3 2018, up from 14.8 million in Q3 2017.
- Among types of transactions completed, all five saw increases:
- Direct deposit: 1.7 billion, up 3.7 percent
- Internet payments: 1.5 billion, up 14 percent
- B2B payments: 896 million, up 9.6 percent
- Healthcare payments: 77 million, up 10 percent
- P2P payments: 32.7 million
We’re particularly impressed with the 14 percent increase in internet payments, which signals more e-commerce merchants are using ACH.
The benefits of ACH processing
We’ve long advocated that ACH payments should be used by all merchants, not just those classified as high risk, for one very practical reason: ACH processing, along with various check solutions, keeps high risk merchants in business. Periodically, we’ll receive a sudden influx of inquiries regarding a specific high risk industry. We’ve seen it happen with online pharmacies, tech support firms and payday lending: acquiring banks, for little or no reason, decide an industry has become too risky to maintain in its portfolio, and thus decides to cease offering banking services.
While such high risk merchants search elsewhere for a new merchant account, they can rely on ACH processing and e-check solutions to carry them over until they find a credit card processing solution.
Another benefit of ACH is its security. Fraud rates for ACH and e-check transactions are minimal compared to internet credit card processing.
Additionally, for merchants who offer recurring billing and subscriptions, ACH processing and e-checks are ideal.
The industries that benefit from ACH processing and e-checks
In truth, we feel every industry can benefit from having an ACH processing solution, but there are several business types for which ACH and other check solutions simply make sense. We field inquiries about ACH from our merchant partners on the financial side, such as payday lenders, forex and binary options, debt collection and credit repair. However, we feel ACH processing is just as viable for a nutraceutical or beauty products business, particularly those that offer subscription payments.
What lies ahead for ACH processing?
While the 2.5-year conversion to same day ACH went seamlessly, merchants utilizing ACH can expect three changes within the next few years:
- Faster funds availability: Currently, ACH payments made by 10:30 a.m. are settled by 1:00 p.m. while payments made by 2:45 p.m. are settled by 5 p.m. NACHA is expected to expand, perhaps adding a third window.
- Currently, there is a limit of $25,000 per credit or debit transaction. Though no figure has been discussed, such limits are expected to be expanded significantly in the near future.
- While same day ACH processing is available for domestic transactions only, it is not far-fetched to believe that international ACH transactions are on NACHA’s radar.
ACH processing and check solutions with Instabill
Instabill has long provided the best ACH processing solutions as well as those for e-checks, virtual checks and Check 21 payments. With a 10-minute conversation, our merchant account managers can walk you through the best check solutions for your business.
It starts with a phone call at 1-800-530-2444.