In the article; A Faster Way to Debit and Credit, the author discusses how consumers and businesses have embraced ACH through the decades:
“A lot of consumers and businesses love Automated Clearing House (ACH) payments. Workers have embraced direct depositing of payroll checks for years, and businesses that can direct debit a customer’s account have seen working capital improve when they go electronic.
For those reasons, use of the ACH network continues to grow. ACH volume grew to 23 billion electronic payments in 2014, equaling transactions of $40 trillion, an increase of 3% over 2013, according to NACHA (The Electronic Payments Association). Business-to-business payments increased by 7%.”
So why do we love this 50 to 60 year old technology? I would suggest it is because it is generally reliable and relative to card and certainly wire transactions, it’s inexpensive. It’s not more secure. It not more flexible. It will be interesting to see as we go spend significant capital to re-engineering ACH for our digital age by making it faster, if we can continue to hold on to the price advantage.
Overview by Sarah Grotta, Director, Debit Advisory service at Mercator Advisory Group
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