In the first half of 2023, the ACH Network saw consistent transaction volume growth, handling 7.7 billion payments valued at $19.7 trillion in Q1—a 6.4% increase over a year prior, and a processing 7.8 billion payments transferring $20 trillion in Q2—a 4.3% and 2.9% increase respectively. The steady rise underscores the ACH Network’s indispensable role in various financial operations, including payroll, tax refunds and business-to-business payments.

In a recent PaymentsJournal podcast, Michael Herd, Senior Vice President of ACH Network Administration at Nacha, and Elisa Tavilla, Head of Debit at Javelin Strategy & Research, discuss the current state of ACH, offering insights into its trajectory and impact.

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ACH is a Booming Market

In March 2022, the dollar limit for Same Day ACH payments increased to $1 million from $100,000. This change led to a noticeable rise in the use of Same Day ACH for higher-value payments.

“The value of Same Day ACH payments for the first half of 2023 reached almost $1.2 trillion, which is more than 50% higher than the previous year,” Held said.

The higher transaction limit has influenced various areas, including payroll and consumer disbursements. Insurance companies, for example, have found it beneficial for making larger insurance payouts, including homeowner claims.

The new limit has also been advantageous for businesses making vendor payments and inter-business transfers. Such transactions often involve larger sums, and the increased limit has allowed for wider adoption of Same Day ACH.

“People are also showing a lot of interest and enthusiasm for faster payment options, including both Same Day ACH and other rapid payment systems,” Tavilla said. “There are numerous areas where these faster payments are valuable, like healthcare, payroll and real estate. It’s clear that the increased transaction limit has opened up more opportunities for businesses to make the most of these faster payment methods.”

And the demand for faster payments is set to continue to grow.

“Various payment systems will likely experience simultaneous growth, especially as transactions move away from checks,” Herd said. “It’s a reasonable forecast considering how many businesses are already accustomed to using ACH. While they become acquainted with alternatives like FedNow and RTP, they will likely begin by utilizing ACH,