ACH Transactions to Top Checks as Top Form of B2B Payment by 2020: New Survey

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Survey of credit and account receivables professionals details current and future payment trends, and payment preferences; free webinar revealing survey findings to be held June 28.

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The big growth in ACH payments anticipated by credit and receivables professionals in just three years is truly significant. It demonstrates the growing importance of ACH payments to support the evolving needs and goals of businesses.

According to a new survey conducted by Credit Research Foundation (CRF) in partnership with NACHA-The Electronic Payments Association, credit and account receivables professionals anticipate that ACH transactions will surpass checks as the leading form of payment received from business customers by 2020. Currently, checks account for almost 50 percent of payments (down from 63 percent in 2014); ACH 32 percent (up from 22 percent in 2014), cards 11 percent (up from 8 percent in 2014), and cash and wire 8 percent (up from 7 percent in 2014). By 2020, respondents anticipate that ACH will account for 45 percent of payments, checks 34 percent, cards 12.5 percent, and cash and wire 8.5 percent.

“The big growth in ACH payments anticipated by credit and receivables professionals in just three years is truly significant,” said Rob Unger, Senior Director, Corporate Relations and Product Management, NACHA. “It demonstrates the growing importance of ACH payments to support the evolving needs and goals of businesses. Because they are electronic, allow for remittance in a variety of formats to be sent with the payment, are more cost-effective than some other payments options, and can be received quickly, ACH payments are becoming a very attractive option to both accounts payable and accounts receivable professionals.”

“Today, credit executives are tasked with managing cash flow from accounts receivable efficiently and effectively, and keeping the general ledger of accounts receivable as clean as possible,” said Matt Skudera, VP of Research and Education, CRF. “Moving to electronic payments enables credit executives to meet these challenges by allowing for more consistent processes, greater control in operations, better management of cash flow position, and more. ACH helps credit executives get one step closer to the nirvana they all seek….. 100% straight throughput processing.”

In addition to benchmarking current and future payment trends, the survey revealed reasons for the changes in payments use. According to the survey, internal factors (29 percent); technology improvements (28 percent); customer push (23 percent); cost (13 percent); and card/bank push (7 percent) drove increases and decreases in payment use.

Despite the actual and anticipated growth of ACH payments, businesses still face some issues with respect to ACH adoption. Overwhelmingly, credit and account receivables professionals want to be paid via ACH. Almost 80 percent cite ACH as their most preferred method of receiving payments. But barriers to receiving ACH payments still exist. Forty-five percent of credit and receivables professionals indicate that they have some customers that are not capable of sending ACH payments. Another 34 percent say that their customers can send ACH payments, but do not properly send remittance with the payment. And another 21 percent suggest that their organizations do not have the proper systems and/or resources to effectively use ACH.

“The survey clearly shows that there is great interest, use and opportunity in ACH payments,” said Unger. “Continued education, exploration of new tools and services like robotic automation of cash application, and leveraging new tactics, such as effectively providing education and marketing ACH to customers, will help break down the barriers to adoption and allow businesses to reap the benefits ACH payments provide.”

On June 28, from 1-1:45 pm Eastern, NACHA and CRF will host a free webinar that will reveal the survey findings in full. To register, visit https://register.gotowebinar.com/register/464549543335303425. (Registration is limited to the first 500 registrants.)

About the CRF/NACHA Payment Benchmarks Survey
The CRF/NACHA Payment Benchmarks survey is a collaborative effort of Credit Research Foundation and NACHA-The Electronic Payments Association. The survey was developed and administered to provide insight into the changing dynamics of today’s payment receivables operations and to benchmark key metrics in the payment-to-cash cycle. The survey was conducted by CRF in the first quarter of 2017 and respondents included more than 130 primarily U.S.-based CRF members, representing organizations with $100 million to more $1 billion in annual sales revenue, and from a variety of industries, including manufacturing; consumer products; food, beverage, and grocery; and more.

About NACHA — The Electronic Payments Association
Since 1974, NACHA - The Electronic Payments Association has served as trustee of the ACH Network, managing the development, administration and rules for the payment network that universally connects all 11,000 financial institutions in the U.S by moving money and information directly from one bank account to another. In 2016, there were 25 billion ACH payments made that moved $43 trillion. Through its collaborative, self-governing model, education, and inclusive engagement of ACH Network participants, NACHA facilitates the expansion and diversification of electronic payments, supporting Direct Deposit and Direct Payment via ACH transactions, including ACH credit and debit payments, recurring and one-time payments; government, consumer and business transactions; international payments, and payments plus payment-related information. Through NACHA's expertise and leadership, the ACH Network is now one of the largest, safest, and most reliable systems in the world, creating value and enabling innovation for all participants. Visit nacha.org for more information.

About Credit Research Foundation
The Credit Research Foundation is an independent non-profit, consisting of a dynamic community of like-minded senior/executive business professionals with a vested interest in maintaining a competitive advantage in the disciplines and processes related to credit and accounts receivable management. Membership contains a cross section of industry segments and representation from companies within the Fortune 1500. Visit crfonline.org for more information.

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Kendra Beasley
NACHA - The Electronic Payments Association
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