May 04, 2015 Dave King
The world continues to move away from traditional transaction processing and toward more advanced electronic payment systems, and this pertains to virtually every region given the fact that even emerging markets are getting on board with these solutions. From helping to bring unbanked and underbanked individuals into the financial system to streamlining the customer experience at the point of sale, electronic and, most notably mobile payments are making waves throughout industries.
One of the first types of electronic payments to surface is also the one that appears to be doing the best today, and this is automated clearinghouse payments, which at once streamline accounting and reporting for businesses while improving the overall efficiency of collections and remittance. In the coming years, many expect the current trends to intensify further, perhaps pushing the global consumer and corporate markets closer toward cashless payment environments.
Major growth recorded
NACHA, the Electronic Payment Association, recently released the results of its latest study on the ACH payment industry, revealing that the total number of electronic transactions increased to 23 billion between 2013 and 2014. This represented roughly 1 billion more transactions through these mediums, and a 5 percent year-over-year increase that proves just how popular the payment method has become in the past few years.
"The ACH Network has continually added capabilities over its history to enable a host of electronic payments, such as payroll, bill payments, business payments, online and mobile payments, international payments, and a variety of others," Janet Estep, president and CEO of NACHA, affirmed. "New initiatives will help us continue to provide new, efficient options for ACH Network users."
Overall, NACHA recorded $40 trillion in global payments transferred through the ACH network in 2014. To put this into perspective, consider the Statista finding that total global gross domestic product hit an estimated $77.6 trillion last year.
More to come
Virtually all businesses can benefit from overhauling their transaction processing systems and strategies to go electronic, as these solutions tend to reduce the total cost of ownership, streamline accounting and reporting, strengthen cash flow and reduce errors every step of the way. ACH, mobile payments and other electronic transactions are expected to only become more prominent as the years progress, meaning a changing of the guard among companies is critical to prepare for the next generation of commerce.