Dive Brief:

• The Clearing House’s transaction volume on its EPN system rose 6.2% last year over 2023 to 20.7 billion transactions, the bank-owned company reported in a Monday press release. That payments volume had a value of $56.4 trillion last year, up, 7.6% over the prior year, a spokesperson for TCH said.
• The volume increase was below the 7.4% annual average the Clearing House has logged since 2021, but the company also noted that volume this year was off to a robust start with a single day record posted on Feb. 14, with 152.4 million transactions.
• Payments volume on The Clearing House’s real-time RTP network jumped 38% last year over 2023, as the value of those payments nearly doubled on the system.

Dive Insight:

Electronic payments volume has been rising worldwide and the U.S. has participated in that trend, though not as ardently on some fronts, such as with respect to instant payments passed within seconds. 

The Clearing House is the private sector operator for automated clearing house payments, also known as ACH payments, so its EPN volume represents just a portion of the electronic flow in the U.S. The Federal Reserve also passes electronic ACH payments. 

Overall, ACH payments volume rose 6.7% last year, over 2023, to 33.6 billion payments worth $86.2 trillion, which was an increase of 7.6%, according to a Jan. 30 Nacha press release.

The slower-than-average annual growth for EPN last year reflects the 7.4% annual average since 2021 skewing higher due to the COVID-19 era, from 2020 through 2022, when ACH volumes surged on increased digital activity, said a TCH spokesperson. In recent years, the slower growth shows a settling down of that effect. In 2023, overall industry ACH volume grew only 4.8% over 2022, the spokesperson pointed out.

Nacha, formerly known as the National Automated Clearing House Association, governs the ACH network, with The Clearing House and the Federal Reserve acting as the private sector and public sector operators, respectively, for the electronic transfer of funds between banks.

The Clearing House and Federal Reserve compete for electronic payments volume and the rivalry on the real-time front has been particularly intense. The Fed launched its FedNow instant payments system in July 2023 to lure more financial institutions to those speedy payments because the RTP network, started in 2017, was principally appealing to the larger banks that are its owners. 

Still, the U.S. has lagged some other countries, including China, in shifting payments to faster electronic rails.

With President Trump stating last month that the federal government will move away from paper checks by September for most of its payments, there’s likely to be an uptick in all types of U.S. electronic payments. In a White House order, the administration said it was tossing out the use of checks to modernize “outdated paper-based payment systems that impose unnecessary costs, delays, and security risks.”

The Clearing House said that ACH volume on its EPN system has been increasing with all its varied users and for all use cases, citing business-to-business payments as experiencing an 11.6% jump last year over 2023.