Monthly ACH volume has hit an all-time high, topping 2 billion transactions and $4.5 trillion in payments in August, according to Nacha – The Electronic Payments Association.
Those numbers represent a 10% increase in transaction volume and a 12% increase in dollar value over August 2017. Nacha said it’s on track to add more than a billion new ACH payments for the fourth year in a row.
“The ACH Network is thriving, and has achieved a milestone of more than 2 billion payments in one month,” Nacha COO Jane Larimer said. “This impressive growth demonstrates that businesses and consumers are choosing to use ACH payments.”
Online bill payments and account-to-account transfers, which rose 24% year over year, drove some of the growth. Those transaction types now make up 27% of all ACH network volume, according to Nacha. Business-to-business ACH payments also grew over 13% and now constitute 16% of ACH network volume.
Last week Nacha approved three new rules to expand another of its growth drivers — same-day ACH — which spiked 243% in terms of payment volume year-over-year in the second quarter of 2018.
Same-day ACH payments on the rise
On Sept. 20, 2019, the funds availability will speed up. Same-day ACH credits processed in the first window will be available by 1:30 p.m. local time, and funds from certain other ACH credits will be available by 9 a.m. local time by the receiving institution.
On March 20, 2020, the same-day ACH per-transaction limit will rise to $100,000. Starting on Sept. 18, 2020, the same-day ACH processing window will expand by two hours.
The increasing momentum in same-day ACH is creating more demand for ways to verify payments and accounts in real-time, noted David Barnhardt, who is EVP at identity verification and authentication service company GIACT in Allen, Texas. The company recently published a white paper about fraud risks and same-day ACH debits.
A lot of the companies that we spoke to said, ‘You know, I really want to do same-day ACH files…I’m scared of the fraud,’” he explained.
“If you think about a company that wants to process their payments quicker or same-day, there is a liability that they’re taking on, and just accepting that payment without a safety net, if you will, or any type of verification,” he said.
“There’s a great deal of buzz right now, especially around identity verification, not only for accounts but all products that are offered,” Barnhardt added. “It’s not just community banks and credit unions, but even some of the big advisors saying, ‘Whoa. This is a real problem.”
Some same-day ACH processors still use trial deposits, sending over a penny or two to see if the account is open. But that doesn’t verify who owns the account, Barnhardt noted. Others may still use so-called screen-scraping technologies that obtain bank information typically not validated by the institutions themselves.
“A lot of these legacy systems, they’re missing the mark on real-time validation with the financial institution. And that’s where you have to be in order to be effective at combating some of the more sophisticated financial crimes that we’re experiencing today,” he said.
— via Credit Union Times