Nacha stands for National Automated Clearing House Association and is the government body that oversees the ACH network. ACH stands for Automated Clearing House. The ACH network got its start back in 1974. The first direct deposits were from the Social Security Administration in 1975 as a test.
Since 2016, Nacha has made many improvements to the ACH network. In 2016, same-day credit payments were introduced. Same-day debit payments followed that in 2017. In 2018 and 2019, faster funds availability were introduced for both payment types. Additionally, operating hours were extended by 2 hours in 2021.
2020 saw the start of transfer limit increases. The first was from $25,000 to $100,000 and then to $1 million in 2022.
Besides infrastructure improvements, the ACH network has seen a surge in volume. This has been led by same-day ACH and business-to-business (B2B) payments. In 2023, both transaction types totaled 31.5 billion in payments valued at $80.1 trillion. In 2022, payment volume increased by 4.8%, with payment value increasing by 4.4%. Since 2023, ACH network value has increased by more than $1 trillion annually.
B2B payments have continued to grow (6.6 billion payments for a 10.8% increase in 2023) as many businesses have decreased their usage of checks. B2B usage includes direct deposit (via payrolls), and insurance payment claims to medical and dental providers.
Consumer utilization includes bill payments and account transfers. These payments have increased by 5.7% to 9.9 billion.
“I often say that the modern ACH Network is thriving; the 2023 figures reinforce that,” said Larimer in a press release. “In 2024, the ACH Network’s focus will include ways to continue growing Same Day ACH. We look forward to a bright future in which the ACH Network continues to be the backbone of the nation’s electronic payment system.”
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