A Publication of MACHA - The Mid-Atlantic Payments Association
Volume XXI, NO. 3, Fall 2008
ACH Volume Reaches 18 Billion Payments
More than 18 billion automated clearing house (ACH) payments were made in 2007, a 12.6 percent increase over 2006, according to statistics released by NACHA—The Electronic Payments Association.
“ACH payment volume continues to double every 5 years with increases experienced across all transaction categories,” said Elliott C. McEntee, chief executive officer of NACHA.
The nation’s financial institutions originated 13.3 percent more ACH payments in 2007 than in 2006. The number of these payments was 16.97 billion, a jump of almost 2 billion over 2006, which were valued at $32.9 trillion. Inter-bank ACH payments, increased by 14.3 percent in 2007. On-us ACH payments, increased by 10.1 percent.
In 2007, the Federal government originated more than 1 billion ACH payments for the second consecutive year. The Federal government’s ACH volume was up 3.6 percent over 2006, and valued at $3.7 trillion.
Consumer Payments
Consumers use the ACH Network primarily to pay bills automatically and electronically, and to receive income and benefit payments via Direct Deposit. NACHA estimates that more than 8.5 billion consumer bills were paid via the ACH Network in 2007, including pre-authorized debits, Internet and telephone-initiated payments, and checks converted into ACH payments.
Annual ACH volume for Accounts Receivable (ARC) check conversion grew by more than 600 million payments to 3.5 billion, an increase of 23 percent. ARC accounted for 33 percent of financial institutions’ ACH transaction growth in 2007.
Internet-initiated ACH payments (WEB) grew by an estimated 26 percent to 2.3 billion. NACHA estimates that 85 percent of Internet-initiated ACH payments are to pay bills via companies’ or billing services’ Web sites, and 10 percent are to transfer funds.
The number of pre-authorized, automatic bill payments known as Direct Payments, increased by 3.6 percent to 3.4 billion payments.
Direct Deposit remains the most widely used type of ACH payment. The number of Direct Deposits in 2007 increased by 6.2 percent to 5 billion payments. The average dollar amount of a Direct Deposit was $1,394.
Business Payments
The total number of business-to-business ACH payments grew to 2.5 billion in 2007, up 8.5 percent over 2006. Financial electronic data interchange grew by 11.9 percent in 2007. In 2007, there were 1.1 billion EDI-formatted remittance records accompanying ACH payments. The number of financial EDI payments in 2007 was 340 million, up 18.1 percent over 2006. ♦
IAT Rules Delayed
NACHA’s Board of Directors has extended the effective date of the International ACH Transaction (IAT) rules and formats for six months, to September 18, 2009.
NACHA and the two ACH Operators - the Electronic Payments Network and the Federal Reserve are strongly encouraging financial institutions to have software changes implemented by March 20, 2009, the original effective date, and to use the six-month extension for additional systems testing, education, and training.
After September 18, 2009, any financial institution that participates in the ACH Network may receive an IAT entry, and must handle it in accordance with OFAC policies. All RDFIs must therefore be prepared for this ACH Rule change.
While a financial institution can rely on vendors for ACH software, transaction processing, and OFAC screening, it remains responsible for compliance with OFAC regulations. A financial institution should work proactively with its vendors on software, screening, testing, and other readiness issues.
Due to MACHA member requests, we will be conducting additional IAT training sessions on November 13, 2008 in Laurel, Maryland.
These sessions will replace the ACH Electronic Check Update workshops originally scheduled on that date. Watch your mail and the MACHA website for session details. ♦
MACHA’s 2008 The Payments Institute Scholarship Winners
Two representatives from MACHA’s membership were in attendance at The Payments Institute held in Atlanta, Georgia July 27 -31, 2008. Ms. Kelly Dickerson of Chesapeake Bank & Trust Company and Ms. Jennifer Zatkos, AAP, of M & T Bank were selected by MACHA to attend the annual NACHA-sponsored payments school.
“The Payments Institute was a lot of fun and an incredible learning opportunity. Everybody, from the faculty and representatives of the RPAs to my fellow students, was there to share their knowledge and experience. I think the fact that it was so interactive was one of the best aspects of TPI. I have already begun using many of the things I learned and the ideas that the people I met shared with me.” Kelly Dickerson, Chesapeake Bank & Trust Company
“The Payments Institute exceeded my expectations. The sessions were interesting and informative. I was able to meet people across many different facets of the Payments Industry. I can use the knowledge I gained at The Payments Institute to assist in the success of my financial institution and to continue developing my career.” Jennifer Zatkos, AAP, M & T Bank
Welcome New MACHA Members
Associate Members
National Geographic Society
Susan Oppold
Financial Institution Members
MainStreet Bank
Police Federal Credit Union
Presidential Bank
Rules Connection
Q: Do the ACH Rules allow ACH Network participants to maintain ACH records electronically?
A: According to the ACH Rules “Any agreement, authorization, written statement under penalty of perjury, or other record required by the rules may be maintained as an electronic record that (1) accurately reflects the information in the record, and (2) is capable of being accurately reproduced for later reference, whether by transmission, printing or otherwise.”
2008 ACH Rules Subsection 1.7.2
As a reminder to all financial institutions, the ACH Rules require that a record of all ACH entries processed by the financial institution is maintained for six years.
If you have any questions about the ACH Network or Check Processing, contact Kimberly Rector, AAP, Senior Director of Education at the MACHA office (410-859-0090). ♦
Check Adjustments Support
The Federal Reserve Banks have consolidated customer support for check adjustment-related inquiries into a national customer support center.
The new toll-free number for all adjustment-related calls from Fifth District financial institutions is 877-372-2457.
Local Fifth District customer service agents will continue to provide support for current day check operations issues, such as those related to the financial institution’s presentment or deposit work from the same day or the previous night, at 800-825-8720.
The new national Federal Reserve Bank Check Adjustments Customer Support Center is staffed by trained check adjustments specialists. The consolidated function provides many benefits, including:
• Extended hours of service
• Nationally-trained staff providing a consistent level of service
• Improved business continuity with staff and system redundancy in multiple Federal Reserve Bank offices
• After-hours voice mail service
• A service philosophy which places importance on “first call” inquiry resolution
If you have any questions about this change, please contact the Fifth District Check Customer Service unit at 800-825-8720. ♦
Meet New MACHA Staff Members
Heather B. Briganti
In June 2008, MACHA welcomed Heather B. Briganti as Director of Education. Heather has worked in the financial services industry for more than twenty-five years. She has been responsible for developing new products and services and has managed multiple functions in the electronic banking and e-commerce areas to support their delivery. Her primary focus has been on ATMs, Web Banking and Debit Cards. Heather most recently served as Administrative Vice President at M & T Bank responsible for ATM Business Development.
In her role as Director of Education for MACHA, Heather will be responsible for developing and delivering educational programs and training that will focus on the various card payment systems, ATMs and alternative payments.
Heather is looking forward to working with and providing support to our membership and sharing her knowledge and experience in the card payment systems.
If you have ideas or suggestion about potential training programs related to card payment systems and processing, please contact Heather at hbriganti@macha.org or by calling the MACHA office at 410-859-0090.
Carmela Grelli-Holland
In January 2008, MACHA welcomed Carmela Grelli-Holland as the new Director of Member Relations. Carmela joins us from her most recent position as Project Administrator at Provident Bank. Her financial industry experience includes over 25 years in retail and commercial banking with Mid-Atlantic financial institutions.
As Director of Member Relations, Carmela will be your contact for information about membership services and benefits as well as any changes that are needed to your organization’s member contact information.
She is coordinating our new Website and the implementation of a membership database that will allow MACHA to expand its communication methods with the membership. Carmela is also visiting MACHA members in an effort to find out how we are doing and how we might expand and improve the services we provide.
If you have suggestions or comments regarding member services, please contact Carmela at cholland@macha.org or by calling the MACHA office at 410-859-0090. ♦
MACHA Communication Improvements
As part of MACHA’s commitment to be a primary resource for information, education and support for various payment systems, we are pleased to announce several new member communication enhancements.
We are nearing the completion of an updated database of our membership. This expanded database of member information will allow MACHA the flexibility to communicate with you both by paper as well as electronically.
In addition to a new database, we are nearly ready to announce an updated MACHA website. This expanded service will be a comprehensive source of information for MACHA members and will serve as your portal to other payment system resources.
The revised website will include a new simple and efficient process for registering for an educational program and purchasing of publications offered by MACHA.
We are continually striving to meet the needs of our membership and hope that you will find the updated website useful and beneficial. Stay tuned for the “official unveiling” of the new MACHA website and let us know what you think!
UPCOMING TRAINING
October 16 Check Returns & Regulation CC
(Morning) Columbia, Maryland
October 16 Check Returns & Regulation CC
(Afternoon) Columbia, Maryland
October 21 ACH Risk Management
(Morning) Easton, Maryland
October 21 Check Risk Management
(Afternoon) Easton, Maryland
October 23 ACH Risk Management
(Morning) York, Pennsylvania
October 23 Check Risk Management
(Afternoon) York, Pennsylvania
October 28 ACH Risk Management
(Morning) Martinsburg, West Virginia
October 28 Check Risk Management
(Afternoon) Martinsburg, West Virginia
October 30 ACH Risk Management
(Morning) Columbia, Maryland
October 30 Check Risk Management
(Afternoon) Columbia, Maryland
November 6 ACH Risk Management
(Morning) McLean, Virginia
November 6 Check Risk Management
(Afternoon) McLean, Virginia
November 13 International ACH Entries*
(Morning) Laurel, Maryland
November 13 International ACH Entries*
(Afternoon) Laurel, Maryland
*Subject matter changed from original schedule
Member National Automated Clearing House Association