Maybe you’re one of those skeptics who’s been holding out from hopping on the electronic payment bandwagon. Guess what: Now, it looks like electronic payments are here to stay … and stay … and stay. For the first time, more bill payments are being made online than through traditional methods.

In 2007, 18 billion payments were made via Automated Clearinghouse (ACH) — a 12.6% increase over the previous year (for more information, go to www.electronicpayments.org).

ACH payments are growing across the board. Payment sources include:

• business-to-business payments
• banks and financial institutions
• the federal government (including tax withholding)
• payroll direct deposit
• Social Security benefits
• tax refunds
• consumer bills, and several more.

Business-to-business ACH transactions hit 2.5 billion in 2007, an 8.5% increase over 2006 (for more info, go to: www.nacha.org). Companies and U.S. government agencies send payments to (and receive payments from) vendors, trading partners, federal tax withholding obligations, cash management transfers and more.

Accounts Receivable (ARC) check conversion increased 23% — 600 million payments — to a total of 3.5 billion payments in 2007.

The 2007 Federal Reserve Payments Study confirmed that ACH payments had the largest annual growth rate — 18.6% — of all non-cash payments.

Banks and other financial institutions initiated 16.97 billion ACH payments in 2007, about 2 billion over the previous year. This represented a 13.3% increase over 2006. 

Tags: ACH, ARC, payment