Tuesday, June 1, 2010

Sputtering Check Conversion

By Mark Brousseau

While the latest statistics from Herndon, VA-based NACHA show that overall Automated Clearing House (ACH) volumes increased slightly in 2009 (2.6 percent compared to 2008 activity), Accounts Receivable Check (ARC) Conversion -- once the darling of remittance operations -- decreased by more than 10 percent during the same period. In 2009, there were approximately 2.4 billion ARC transactions, NACHA reports, compared to nearly 2.7 billion ARC transactions the previous year.

The drop in ARC volumes comes as no surprise to Creditron, Inc., Founder and CEO Wally Vogel (wvogel@creditron.com). Vogel expects ARC volumes to continue to fall as consumers move away from writing checks for recurring remittances and towards electronic mechanisms such as Internet-initiated payments (which registered a stout 9.7 percent volume increase in 2009, NACHA reports).

Vogel says that, "As far as we have seen, ARC is not really going anywhere among mid-volume processors. Our clients are either moving to Check 21 or staying with what they have. Many clients don't perceive a significant cost benefit if they already have an automated encoding solution."

Vogel adds that Creditron is seeing "slow but steady growth in Check 21 among its current clients, and virtually all of its new installations include Check 21. The biggest reason our clients are reluctant to implement ARC is the notification requirement, which isn't a factor if they go with Check 21."

What are you seeing?

No comments: