NACHA Reports ARC Is Highest-Quality Consumer ACH Debit

Herndon, VA ? New statistical information from NACHA – The Electronic Payments Association shows that ARC – the Accounts Receivable check conversion application – is the highest-quality consumer-oriented ACH debit application. Additionally, a recent NACHA survey of 34 financial institutions shows that ARC is having little customer service impact on financial institutions that receive ARC payments.

“The quality of ARC in the marketplace is extraordinary,” said Elliott C. McEntee, President and Chief Executive Officer of NACHA. “Not only is ARC the fastest growing application in the history of the ACH Network, it performs better than any other consumer-oriented ACH debit application.”

NACHA recently reported that there were 266.2 million ARC payments in the 3rd quarter 2004, compared with 5.3 million in the 3rd quarter 2002. With an estimated total of 1.25 billion ARC payments in 2004 (including an estimate of on-us payments), ARC will have surpassed 1 billion payments annually faster than any other ACH payment application. At the same time, the rate at which ARC payments are returned has fallen from 2.34 percent in the 3rd quarter 2002 to 0.54 percent in the 3rd quarter 2004, an improvement of 76.9 percent.

“The data show that ARC is working smoothly, and that issues such as administrative returns and consumer acceptance have been successfully addressed,” said McEntee.

The ARC performance data suggest that ARC is having relatively little operational impact on receiving depository financial institutions (RDFIs). To test this hypothesis, NACHA conducted a survey of 34 RDFIs. Only 1 out of 31 responding institutions reported that ARC-related customer service issues are significant. On a scale of 1-to-5, with 1 being “insignificant” and 5 being “extremely significant,” the average response was 2.1. When asked if they are concerned about ARC-related customer service issues, 27 out of 33 responding institutions (82 percent) said “no.”

The ARC application became effective on March 15, 2002, and allows checks delivered to remittance and lockbox locations to be converted into ACH debits. ARC is used for consumer bill payments such as credit cards, mortgages, insurance, and telecommunications.

About NACHA – The Electronic Payments Association
NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits transfer (EBT). Visit NACHA on the Internet at www.nacha.org.