ACH and EFT payments show impressive growth
Posted on May 21, 2007 by Bryan Johnson
Electronic checks and electronic funds transfers (EFT), also generally known as ACH payments, are becoming increasingly popular methods of payment. Transactions such as check by phone, automatic debits (reoccurring billing), direct deposit, and electronic funds transfer are convenient, low cost methods of moving money. According to the Nilson Report, in 2006 the ACH network ranked second only to Visa in transaction volume with $13.43 billion, up 15.3%. Visa's 2006 growth rate was 13.2%.
Two of the most impressive areas of consumer ACH transactions relating to the payment processing industry were in Internet and Telephone categories. Consumers are increasingly pulling out their check book to pay for goods and services. The growth of electronic ACH/check payments appears to be coming at the expense of credit cards and paper checks.
Retailers love taking electronic checks or other forms of ACH payments versus credit cards because it saves them up to 70% of the fees they would have to pay the card networks such as Visa. Preferences to pay via a checking account are driven by security and fraud concerns that are most associated with credit cards and because people who don't have a credit card can now start buying goods and services in ways they couldn't before. If you haven't already, you should start looking in to ways in which you can replace credit card payments with electronic checks or other ACH methods. While every business is not successful in making this introduction, it's worth looking into.
