Direct Payment via ACH is the Leading Consumer Bill Payment Method

According to a study of 1,000 billers released today by NACHA – The Electronic Payments Association, Direct Payment via ACH is the leading method consumers use to pay their bills. The study found that the great majority of billers – more than three-quarters of those that offer electronic payment options – offer Direct Payment via ACH, and now, almost 50 percent of consumer bills are paid through this method. Forty-two percent of consumer bills are still paid through the mail, and 11 percent are paid with credit/debit cards.

The findings also show that billers prefer receiving ACH payments over cards 48 percent to 21 percent.  Specifically, billers prefer recurring ACH payments, citing this option as the most favorable payment method. Consumers, on the other hand, prefer one-time ACH payments for bill pay. Of the 47 percent of consumer bills paid via Direct Payment, 25 percent are one-time ACH payments, 11 percent are recurring ACH payments, and another 11 percent are ACH payments originated by biller service providers.

Physical Endorsements Key in Mobile Remote Deposit Threat

One of the biggest discussions and concerns in the Remote Deposit Capture world lately has revolved around the Mobile version of this process. To be more specific, the threats and opportunities for fraud to occur with Mobile Remote Deposit.

The major threat everyone seems to be honing in on is the chance for multiple deposits at different financial institutions or check cashing locations, of the same paper item.

An easy example of this would be an individual uses his smart phone to execute a Mobile Remote Deposit of a check for $100 into a bank account. That individual then goes to a check cashing (or another financial institution) and cashes that same check for $100.

The next day when the funds become available in their account at the financial institution where the Mobile Remote Deposit was executed. The individual now has used the same check for $100 to claim $200 from it.

POP Transactions Still Big Player in Check Conversion

via www.panini.com


Strange as it may sound, the use of checks at point-of-sale (POS) remains highly relevant. Certainly in terms of historical comparisons they exist in a diminished capacity, but look closely and you will see paper checks in many POS environments.

Countries including Brazil and France still experience high usage of checks at POS. Even in the US, checks are an important part of the retail payments mix, representing nearly 10% of all US check volume or an estimated 2.6B payments. It’s also important to consider that check intensity varies among vertical segments within retailing. Generally, you find higher check usage in grocery, discount retailing, convenience (petro) stores, pharmacies, and large ticket segments (i.e. furniture, automobiles, appliances, etc.). In addition, there are specific applications associated with higher check usage. For example, in Brazil checks are often used to pay for large ticket items on a payment plan. In the US small businesses often use checks for purchases because the payment method is highly integrated with their business processes and habits.

Direct ACH Payment Leading Consumer Bill Payment Method

via www.nacha.org

HERNDON, Va., May 22, 2013 – According to a study of 1,000 billers released today by NACHA – The Electronic Payments Association, Direct Payment via ACH is the leading method consumers use to pay their bills. The study found that the great majority of billers – more than three-quarters of those that offer electronic payment options – offer Direct Payment via ACH, and now, almost 50 percent of consumer bills are paid through this method.  Forty-two percent of consumer bills are still paid through the mail, and 11 percent are paid with credit/debit cards.

The findings also show that billers prefer receiving ACH payments over cards 48 percent to 21 percent.  Specifically, billers prefer recurring ACH payments, citing this option as the most favorable payment method. Consumers, on the other hand, prefer one-time ACH payments for bill pay. Of the 47 percent of consumer bills paid via Direct Payment, 25 percent are one-time ACH payments, 11 percent are recurring ACH payments, and another 11 percent are ACH payments originated by biller service providers. 

ACH Network: Supporting Payments Innovations

via www.nacha.org

At PAYMENTS 2013, The Electronic Payments Association announced the forthcoming launch of two new opt-in programs: Extensible Markup Language (XML) Remittance and Deposited Check Truncation (DCT). Both programs, which are open to all FIs, provide innovative solutions to industry needs.

The XML Remittance program, which launches in May, enables the use of the XML data format for transmitting business-to-business (B2B) transactions through the ACH Network. Through NACHA opt-in rules, agreements and guidelines, and an XML data dictionary, which will standardize formats, the program will help financial institutions, service providers and corporations facilitate the electronification of the B2B remittance process, allowing for improved efficiencies and cost savings.