Global Automated Clearing House Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Global Automated Clearing House Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Automated Clearing House (ACH) An electronic funds transfer system that manages electronic banking transactions. Any entity (business, government organization, or individual) can use ACH to send or receive funds. An automated clearing house essentially acts as a financial center, helping individuals and organizations move funds from one bank account to another. ACH is used for a variety of funds transfer transactions, including direct deposits of paychecks and monthly debits for everyday payments. Merchants typically enable consumers to pay bills via ACH by providing an account number and bank routing number. Many online payment services also conduct transactions through ACH, including the online bill payment services of most banks and credit unions.

Market Overview:

The latest research study on the global Automated Clearing House market finds that the global Automated Clearing House market reached a value of USD 12650.99 million in 2022. It’s expected that the market will achieve USD 20568.35 million by 2028, exhibiting a CAGR of 8.44% during the forecast period.

Low cost of use

The economics of using ACH to complete the transaction process is an important reason for the rapid growth of the ACH industry. ACH is a cheaper solution compared to wire transfers and credit cards. For example, a $5,000 transaction costs about $25 using a wire transfer, $65 to $175 using a credit card, and only costs the merchant $0.25 to $5 if done via ACH. As such, ACH is typically used for low-value, high-volume payments. Most bill payments, salary payments, and other such transactions are made through the ACH system. Business users can also pass on ACH fees to customers. Drop, for example, encourages users to link their financial accounts to pay with ACH. Users are then able to earn points for food, shopping and travel purchases from a wide range of suppliers. Those points can be redeemed at businesses like Starbucks, Amazon and Netflix. Catch is an ACH-based shopping platform that allows users to accumulate 5-10% store credit for every purchase made through Catch, and Catch also offers a $10 sign-up bonus. These measures to help users benefit when paying with ACH can not only save business fees, but also increase user brand loyalty, while promoting the use of ACH payment methods. For consumers, the most intuitive use of ACH is to take control of their financial situation through fast and reliable direct deposit. According to statistics, more than 93% of American workers get paid through direct deposit. Using ACH, consumers can quickly withdraw money, receive wages, reimbursements, and bonuses without paying additional fees. Consumers can take advantage of ACH's automatic payment to make recurring payments for monthly subscriptions, without having to pay high processing fees repeatedly, and can effortlessly replicate and rely on it every month. In addition, since the ACH payment process is highly automated, the labor cost is very low, and the only thing to consider is the infrastructure cost. Therefore, under the trend of increasing electronic transactions in the future, the unit cost of transactions will continue to decrease. ACH will be one of the cheapest forms of money transfer. Therefore, the low-cost nature of the ACH usage process will drive the industry forward.

Enhanced transaction convenience

Online transactions are extremely fast and easy as the ACH network aggregates transactions and processes them at specific times of the day. Instead of spending time queuing at banks and writing and processing checks, or spending days waiting for check deposits to clear, consumers can deposit funds into their bank accounts via online direct deposit. Credit card payments typically require consumers to fill out multiple fields, including the card's sixteen-digit number, expiration date and card verification number, as well as the associated billing address and zip code. Users who choose ACH payment only need to enter their online banking user name and password, and can complete information input and arrange payment within minutes. Consumers' financial control can be enhanced through ACH's automated collection and recurring payments, accurate forecasting of cash flow and timely re-deposit of returned transactions. For businesses, businesses can use ACH to create authorizations and send a link to customers to collect payments as needed without customers having to physically mail a check or pay with cash. ACH helps simplify business workloads because automated ACH transactions are more convenient and accurate than writing checks, and ACH payments can be set up to recur without additional labor costs or check surcharges. Using ACH payments for large businesses can reduce the hassle of distributing physical checks to employees. At the same time, by integrating ACH Debit Transactions with corporate accounting software, businesses can improve the efficiency of financial management such as bank reconciliations. For online retailers, ACH payments help them increase payment accuracy and customer retention, improve forecasting and capture funds faster. ACH payments are typically processed within one to two business days, increasing the incentive for retailers to ship items. In addition, the convenience and economy of ACH remittances improve the efficiency and timeliness of government and corporate transactions, helping both parties reduce costs and improve cash flow. Some APH operating companies can help users modify files to comply with NACHA format standards, or directly use their ACH services to perform data transfers that comply with NACHA format requirements. Therefore, the flexibility and convenience of ACH transactions are conducive to the continuous expansion of ACH enterprises.

Transfer Amount Restrictions and Region Restrictions

Banks and financial institutions may limit the amount of ACH transfers. If the user wants to make a large transaction, it may need to be completed in multiple steps. The amount an individual can transfer depends on the transfer limits and account history set by each bank, the most common being daily and monthly transaction limits. In March 2022, Nacha increased the daily ACH limit to $1 million per transaction. Depending on the financial institution, users may use ACH transfer limits that are significantly lower than the limits imposed by NACHA. Chase tops the list with an ACH transfer limit of $10,000 per transaction or $25,000 per day. M&T Bank limits are set at $10,000 per day (inbound) or $20,000 per day (outbound). The transfer amount limit may affect the normal transactions of individuals. For example, a consumer wants to sell a vehicle in bulk, and if the ACH amount is insufficient, the transaction may be blocked. Another disadvantage is that ACH network ACH transfers are currently mainly used in the United States and a few European and Asian countries, as well as special bilateral agreements. ACH has a small market share in other regions and has great geographical restrictions. Users basically do not use the ACH payment system for international transfer transactions. If a U.S. business wants to send money to and from a foreign customer, it typically uses a wire transfer or other similar payment method. Therefore, ACH's transfer amount restrictions and regional restrictions will have a negative impact on the development of the industry.

Region Overview:

In 2021, the share of the Automated Clearing House market in United States stood at 68.09%.

Company Overview:

Wells Fargo, JPMorgan, Bank of America were the top 3 players in the Automated Clearing House market in 2022, taking up a market share of 14.01% together.

Segmentation Overview:

By type, ACH Debit Transactions segment accounted for the largest share of market in 2021.

Application Overview:

By application, the Payment segment occupied the biggest share from 2017 to 2022.

Key Companies in the global Automated Clearing House market covered in Chapter 3:

US Bank
Fifth Third Bank
Citi
TD Bank
JPMorgan
Bankgirot
PNC
Capital One 360
Truist
Navy Federal Credit Union
USAA
Bank of America
Wells Fargo
Charles Schwab

In Chapter 4 and Chapter 14.2, on the basis of types, the Automated Clearing House market from 2018 to 2029 is primarily split into:

ACH Debit Transactions
ACH Credit Transactions

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the Automated Clearing House market from 2018 to 2029 covers:

Payment
Transfer

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2018-2029) of the following regions are covered in Chapter 8 to Chapter 14:

North America (United States, Canada)
Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)
Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)
Latin America (Brazil, Mexico, Argentina)
Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)