- The pace of electronic payments jumped last year at a faster pace than the year before as top banks sent more payments than ever during the COVID-19 pandemic, with 26.8 billion transactions worth $61.9 trillion, according to Nacha’s annual report.
- In total, the top 50 bank originators and receivers of payments logged an 8.2% jump in volume and a 10.8% increase in value compared to 2019, said the clearing house organization, which was formerly known as the National Automated Clearing House Association. By contrast, the annual volume and value rose by 7.7% and 8.9%, respectively, in 2019 over the prior year.
- The biggest originators and receivers remained the same last year as in 2019, with Wells Fargo, JPMorgan Chase, and Bank of America topping the list of originators, in that order, in both years and the same three banks also led the pack in receiving payments both years in reverse order. There was more movement in the ranking order among mid-tier players.
Digital payments have clearly been catching on with the annual volume climbing by more than a billion annually in each of the past six years and the annual value growing by more than $1 trillion in each of the last eight years, according to the Nacha report issued last month.
That means that last year the payment volume equaled about 81 payments for every person living in the U.S., the organization said. The rise in transactions was driven last year by increased business and consumer payments shifting online as the pandemic kept people working and shopping from home to avoid transmission of the coronavirus. While digital payments have been gaining traction for years, the pandemic supercharged the transition.
Nacha, which oversees the automated payments network and has roots reaching back to 1968, said credit volume rose about 12% to 11.6 billion transactions valued at about $40.2 trillion whereas debt volume rose a lesser 5% to about 15.2 billion payments for about $21.7 trillion. The value of transactions for both increased about 11%.
The biggest dollar value payment area last year was in direct deposit payments where $8 billion was passed, with a 12% jump over 2019, but that was closely followed by $7.7 billion in payments over the internet in a 15% increase in that area, likely reflecting the surge in online shopping last year. But the biggest rate of increase of the five categories Nacha tracked was in person-to-person payments, which increased a whopping 42.2% to $217.6 million.
Still, Nacha noted the pandemic created challenges for payments companies too. “The volume increases in [automated clearing house] payments in 2020 by banks and credit unions are truly remarkable given the challenges posed by the pandemic,” Nacha Senior Vice President Michael Herd said in a March 30 release accompanying the report.
The top 50 originating banks account for about 93% of the payments volume while the top 50 receiving banks account for about 61%, Nacha said.