ACH Growth Gets Boost from Stimulus Payments and Shift from Checks

Strong growth continued on the ACH Network in the final quarter of 2020, with 7 billion payments made, an increase of nearly 9% from a year earlier. Combined with data on check payments, the results show the dramatic impact of the pandemic on the use of payments by Americans, businesses and government agencies compared to a year ago, before the pandemic had significantly impacted the U.S. economy.

“Using the modern ACH Network for remote, electronic payments is an even better choice today for American consumers, businesses, and government agencies,” said Jane Larimer, Nacha President and CEO.

ACH growth accelerated in key areas that represent a quickening shift away from check payments. Payments to individuals by Direct Deposit increased by 11.1% to more than 2 billion. Direct Deposit is used for payroll and other disbursements from businesses to individuals, and for government payments such as Social Security benefits, unemployment assistance, tax refunds and Economic Impact Payments.

Internet-initiated consumer ACH payments for bills and other account transfers grew by 15.2% to more than 2 billion. Person-to-person (P2P) payments completed by ACH grew by 44% to 62 million.

Business-to-business (B2B) payments by ACH for vendor and supply chain payments rose almost 15% from the fourth quarter of 2019 to 1.2 billion.

At the same time, the volume of ACH payments initiated by a check (i.e., check conversions) declined by more than 23% in the fourth quarter compared to a year ago. Check conversion is used by some companies to process checks mailed to pay bills, and checks presented for purchases at the point-of-sale. In addition, the most recent data from the Federal Reserve on check payments (for the third quarter, 2020) show an overall decline in commercial check payments of 13.2%. (Source: https://www.federalreserve.gov/paymentsystems/check_commcheckcolqtr.htm)

Same Day ACH had 96.7 million payments moving $139.2 billion in the fourth quarter. These represent growth rates of 35.7% and 101.2%, respectively, compared to the fourth quarter of 2019, the last full quarter before the increase in the Same Day ACH dollar limit. The limit was raised to $100,000 per payment in March 2020. 

An infographic showing fourth quarter results is available for download as a PDF.