Most Consumers Familiar With ARC Check Conversion, Have Few Concerns, NACHA Research Shows

HERNDON, VA – The good news keeps rolling in for ARC — the Accounts Receivable check conversion application. Already the fastest-growing payment application in the 33-year history of the Automated Clearing House (ACH) Network, and the highest-quality consumer ACH payment application, new consumer market research conducted for NACHA – The Electronic Payments Association shows that consumer awareness of ARC is high and that most consumers don’t mind having their checks converted into electronic ACH payments.

“The survey results demonstrate that check conversion can happen on a massive scale with little impact on consumers, although NACHA still recommends that sufficient attention be paid to customer service and education,” said Elliott C. McEntee, President and Chief Executive Officer of NACHA.

ARC allows companies that receive consumers’ checks at remittance and lockbox locations to convert them into electronic ACH payments, the same, safe electronic payments system used for Direct Deposit. ARC is used for consumer bill payments such as credit cards, mortgages, insurance premiums, and telecommunications and utility bills. NACHA estimates that in 2004 there were 1.25 billion consumer checks converted into ARC payments, and that at its current growth rate may reach 2 billion payments in 2005.

When read a description of the ARC check conversion process, 69 percent of the consumers surveyed said that they are familiar with the process. When provided with an open-ended opportunity to express any objections or concerns about check conversion, 55 percent said they had none.

“Those are impressive numbers, given that ARC is less than three years old and that there were concerns about consumer acceptance when it was new,” said McEntee.

The research also found that only 4 percent of check writers have called their financial institutions in the past six months in reference to a check conversion payment. This is consistent with the results of previous NACHA research, in which only 1 out of 31 financial institutions surveyed reported that ARC-related customer service issues are significant.

Interestingly, with all of the recent publicity regarding the Check 21 legislation, no consumers responded to the open-ended opportunity with concerns that their checks would clear more quickly.

The market research was conducted for NACHA by The Response Center, which completed telephone interviews with a nationally representative sample of 404 consumers who regularly send checks to make bill payments. The interviews were conducted between October 28 and November 7, 2004. The margin of error is +/- 4.9 percent.

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.