Despite pandemic, it's business as usual for NACHA

Editor's note: This article is part of ATM's series, Covid-19: A look back at a year of change.

As COVID-19 made its presence known last year and began shutting down businesses all over the world, the National Automated Clearing House Association never paused. It continued to manage the administration, development, and governance of the ACH network — the payment system that drives direct deposits and direct payments for U.S. banks and credit union accounts.

Shutting down operations for NACHA just wasn't an option— as that would have caused a major disruption in the movement of funds throughout the globe. In 2020, despite the pandemic, NACHA reported there were nearly 27 billion ACH Network payments made valued at close to $62 trillion.

To say that NACHA and the ACH network are at the core of the payments industry is an understatement. While the ACH network moves payments between bank accounts, NACHA, a non-profit association, ensures that the network operates from a strict set of rules governing financial institutions and fintechs as they set up their own solutions to transfers funds.

It also falls to NACHA to address claims of non-compliance; resolve disputes, educate and provide accreditation and when necessary, offer advisory services.

"In the payments industry, we have a common goal to ensure that payments are safe, secure and easily accessible to all. During the pandemic, we continued to meet that goal," said Heather McElrath, the senior director of communications for NACHA. "Specific to payments related to the pandemic, NACHA worked independently by handling increased volume on the ACH network as it shifted to electronic payments, and handled two rounds of economic impact payments — hundreds of millions of which were made by direct deposit.

ATM Marketplace recently interviewed McElrath about NACHA and how the association collaborates to allow hundreds of organizations to enhance and enable electronic payments and financial data exchange across the globe.

Q: With all that NACHA does to govern the ACH network, do stakeholders have any input in the process?

A: Yes. NACHA is open and transparent and we provide numerous ways for stakeholders to have a voice in the development process, which fosters compatibility and integration in the payments system.

Q: What type of support does NACHA provide the ACH network?

A: NACHA provides many services that support the use of the ACH network including a Risk Management Portal —a single resource for financial institutions to access NACHA's risk management services and databases, education, certification and consulting.

Q: Did volume increase or decrease on the ACH network this past year?

A: Volume on the ACH Network experienced record growth in 2020 as the pandemic accelerated the nation's shift to electronic payments and included:

• Direct Deposit of salaries and wages, benefits and assistance payments, and other disbursements from organizations to individuals, that increased 12% to more than 8 billion payments.
• Internet-initiated consumer payments for bills, account transfers, and other payments increased 15% to more than 7.7 billion payments.
• Person-to-person payments and transfers increased 42% to 218 million and business-to-business payments for supply chain, vendor payments, bills and other transfers increased by almost 11% to 4.4 billion.

Q: What role did financial institutions play in this growth?

A: Financial institutions were positioned to better help their customers make and receive payments remotely and electronically, instead of sending and receiving checks in-person and through the mail; and in having fewer depositors in their branches.

Q: ATM interviewed one of your partners, Bluefin recently. How do you work with other companies?

A: NACHA and Bluefin have a common goal of securing the financial information used to initiate ACH payments. We came together to help businesses and organizations work toward compliance with the next level of ACH data security requirements. Advancing the ACH network is a core NACHA strategy, and we continue to search out partners with offerings that align with that strategy.