For the first time, the number of ACH debits originated by commercial financial institutions exceeded the number of ACH credits, thanks to the rapid growth of consumer e-checks. Collectively, more than 1.3 billion e-check payments were made last year, a 154% increase over the prior year. According to NACHA, the five e-check applications are:
1. Internet-initiated ACH debit: American consumers initiated 689 million ACH debits on the Internet, tripling in volume for the second consecutive year. NACHA estimates that 80% of these payments were to pay bills, 18% were to transfer funds, and 1% were to make purchases. The average amount of a Web e-check was $291.
2. Accounts receivable check conversion: More than 220 million consumer check remittances were converted into ACH debits, an 825% increase over 2002. The average amount of an ARC payment was $296.
3. Point-of-purchase check conversion: Approximately 204 million consumer checks were converted into ACH debits at retail locations, up 22%. The average amount was $70.
4. Telephone-initiated ACH debits: Americans made 170 million e-check payments over the telephone in 2003, up 151%. The average amount was $374.
5. Re-presented check: Retailers made 31.3 million of these transactions in 2003, up 20.1%. The average dollar amount was $155. (A re-presented check entry is a consumer NSF check that is re-presented for payment electronically rather than through the paper check collection system.)
The number of Direct Deposits in 2003 increased by 4.2% to more than 4.0 billion payments. Direct Deposit is used for payroll, expense and travel reimbursement, pension and annuity payments, interest payments, retirement and mutual fund distributions, Social Security, Veterans and other government benefits, and tax refunds. The average dollar amount of a Direct Deposit was $1,234. NACHA estimates that more than 65% of the private-sector workforce in the U.S. use Direct Deposit to get paid.
The number of Direct Payments in 2003 remained steady at 2.8 billion. A Direct Payment is a pre-authorized debit that uses the ACH Network, and is typically used for recurring consumer bills such as mortgages, loans, utilities, investments and charitable contributions. The average dollar value of a Direct Payment increased by 14% to $826.