NationalACH

Archive for December, 2009

The Federal Deposit Insurance Corporation released findings from its National Survey of Unbanked and Underbanked Households. According to the study, more than 25%of all US households are unbanked or underbanked. Most of those households are low-income and/or minority.

Unbanked households do not have anyone in the house that has a checking or savings account. Underbanked households may have checking or savings accounts but rely on other financial services such as nonbank money orders, nonbank check-cashing services, payday loans, rent-to-own agreements, or pawn shops at least once or twice a year.

Of the surveyed households surveyed, 7.7%, or 9 million households, were unbanked. Another17.9%, or 21 million households, was underbanked.

Minorities likely to be unbanked include blacks, at 21.7% black households and Hispanics at 19.3%. American Indian/Alaskans account for 15.6%. Least likely to be unbanked are Asians at 3.5% and whites at 3.3%.

Households with income under $30,000 account for at least 71% of unbanked households. Nearly 20% of lower-income U.S. households, or almost 7 million households, earn below $30,000 per year and do not have a bank account. Only 4.2 % of households with annual income between $30,000 and $50,000 and less than 1 percent of households with yearly income of $75,000 or higher are underbanked.

Info on ACH payments at nationalach.com

A new report titled the 2009-2010 Payments Processing Benchmark Study has just been released by Taipi . Interesting highlights include:

• The Federal Reserve Bank System is encouraging migration from paper to image-based check clearing by increasing the fees for clearing paper checks. There are now only 4 sites for clearing sites for paper checks is now in paper check as compared to 45 just a few years ago.
• Check 21 remote deposit capture and image clearing are gaining ground as alternatives to paper-based systems. Image replacement clearing will continue to affect the economics of the remittance processing industry in the coming years.
• Advances in image extraction and one-pass processing combined with Check 21 deposits provide more benefits than ACH or image deposits alone.
• ACH ARC payment processing peaked at 2.7 billion payments in 2008 and will be lower than that for 2009.
• Paper check volumes are continuing to decrease. However, tens of billions of paper checks will continue to be written annually by consumers and businesses for bill payment. Processing paper checks are still very cheap compared to the cost of processing a debit or credit card payments.
• Online bill payments and emerging mobile payments will transform the payments mix for billers. The new technologies offer new opportunities but add complexity as customers, banks and billers respond to an array of payment processing options.