Welcome to the June 2025 Innovating Payments Executive Summary. In this issue, the Federal Reserve Bank of Atlanta releases data from its 2024 Survey and Diary of Consumer Payment Choice, which indicates a declining preference for paper checks. Meanwhile, the U.S. Department of the Treasury issued a request for information (RFI) related to an executive order aimed at transitioning federal disbursements to electronic payments, as reported by Financial Regulation News on June 3.
In other news, Nacha has released ACH Operations Bulletin #1-2025, which addresses Same-Day ACH Processing of ACH Returns by RDFIs and states that Nacha strongly encourages faster returns using same-day processing windows. Additionally, CU Insight highlights the importance of ACH modernization for credit unions.
A new PYMNTS Intelligence study emphasizes four key themes regarding how financial institutions and payments providers view the influence of Generation Z and the emerging Generation Alpha on expectations for payment experiences, workflows, and even business models. Read on to learn more.
The Federal Reserve
The Federal Reserve of Atlanta recently examined consumer preferences regarding check usage in a blog post published on June 2. Despite data from the Survey and Diary of Consumer Payment Choice indicating that one-third of U.S. consumers had used checks within the past 30 days, broader consumer sentiment suggests a declining preference for this payment method:
- In 2024, over 90% of consumers indicated that they prefer alternatives to checks for bill payments. Only 6% used checks to pay.
- In 2024, consumers rated checks as the second-worst option for convenience, speed of payment, and setup. Only money orders ranked lower in these categories.
- Consumers also rated checks poorly for security—only cash received a lower ranking.
Also noteworthy:
- Compared to October 2023, there were statistically significant increases in the number of all payments (increased by about two payments, or 6%, to 48 on average per consumer per month) and in the number of credit card or charge payments (also increased by about two payments, to 17).
- The average value per consumer per month of all payments also increased significantly, from $5,382 to $6,867 per month, representing a 28% increase.
- The average payment dollar value was $142, representing a 21% increase from the previous year.
- The proportion of consumers paying with cash in the prior 30 days declined from 87% in 2023 to 83% in 2024.
- Making a check payment in the prior 30 days declined from 40% of consumers to 35%
To read more, view interactive charts, and download data, click here.
U.S. Department of the Treasury
Treasury Issues RFI for Transition to Electronic Payments
“The U.S. Department of the Treasury issued a request for information (RFI) related to an executive order that seeks to transition federal disbursements to electronic payments,” reported the Financial Regulation News on June 3. “The executive order (EO) in question is 14247, ‘Modernizing Payments to and From America’s Bank Account.’ Beginning Sept. 30, all federal payments that are currently made by paper check —including Social Security benefits, tax refunds, and vendor payments — will be made electronically.”
The Treasury has identified paper checks as an increasing target for fraud, making them a more common entry point for financial crimes. In response, it is dedicated to educating the public about these growing risks while equipping Americans with the necessary tools and knowledge to combat fraud and make informed financial choices.
The RFI invites individuals and organizations to comment on the Treasury’s implementation of the executive order, providing a platform for recommendations aimed at enhancing public awareness and helping consumers, particularly those who are unbanked or underbanked, transition to digital payments.
For more information, see the press release.
Nacha
ACH Operations Bulletin #1-2025-Same-Day Processing of ACH Returns by RDFIs
In other news, Nacha has released ACH Operations Bulletin #1-2025, which focuses on Same-Day ACH Processing of ACH Returns by RDFIs. A summary follows:
A Nacha Request for Information in 2024 asked, “As an RDFI, do you currently return any entries using the same-day windows?” Only 59% of respondents said they use Same Day ACH processing windows to send any returns. Of those that do, 45% use same-day processing for less than half of their returns. The responses suggest that many RDFIs are foregoing the benefits of sending returns in a same-day window. Nacha recommends faster returns as a best practice that benefits RDFIs, including the use of same-day processing windows for the return of forward entries that were not Same Day ACH Entries.
The ACH Operations Bulletin concludes with:
Nacha strongly encourages faster returns using same-day processing windows for the reasons stated in this bulletin. Nacha also encourages any RDFI whose vendor or processor does not support the use of same-day processing windows for returns to ask its processor to enable the capability. RDFIs can experience a liquidity benefit and a reduction in operational risk from the faster return of ACH debits, while ODFIs and their Originators can benefit from receiving any ACH return as soon as possible in order to take appropriate actions. Faster returns, therefore, bestow a network benefit.
You can download the ACH Operations Bulletin here.
Credit Unions
Why ACH Modernization Matters for Credit Unions
Despite the growing popularity of instant-payment solutions like the FedNow® Service and the RTP® network, ACH remains a fundamental component of the U.S. payments ecosystem, particularly for credit unions, according to CU Insight.
“In 2024, the ACH Network experienced a notable increase in both payment volume and value,” says the news release. “Overall, ACH volume rose 6.7% to 33.6 billion payments, and the value of those payments increased 7.6% to $86.2 trillion. Same Day ACH, a faster payment method within the ACH Network, also saw significant growth, with a 45.35% increase in volume.”
To remain competitive, credit unions must meet rising customer expectations for speed and efficiency while unlocking new opportunities and reducing risk. The article states that a modern ACH solution should provide:
· End-to-end automation
· Built-in compliance
· Seamless integration
· Advanced reporting
· Real-time controls
Upcoming rule changes from Nacha and the industry-wide shift to ISO 20022 messaging underscore the necessity for credit unions to accelerate their plans for modern infrastructure.
“ACH isn’t going anywhere,” but how your credit union uses it must,” concludes the article.
To read this story in its entirety, click here.
Miscellaneous
How to Woo Gen Z Customers
“Change in payments used to be a matter of technological evolution. Now it’s a matter of generational urgency,” says the June issue of What’s Next in Payments from PYMNTS Intelligence. “Banks and payment firms are racing to win over Gen Z and Gen Alpha, and three payments executives reveal to PYMNTS the stark ultimatum these younger cohorts have rallied around: deliver instant, seamless digital experiences or risk losing relevance in a market where patience—and paper—is no longer part of the plan.”
Four key themes emerged regarding how financial institutions and payments providers perceive the influence of Generation Z and Generation Alpha on expectations for payment experiences, workflows, and even business models:
The bottom line?
To attract these generations, infrastructures must be modular, flexible, and future-ready, ensuring seamless transactions across diverse user preferences. As the consumerization of B2B payments accelerates, companies must increasingly adopt user-friendly and intuitive payment experiences that mirror those in the consumer space. At the core of this transformation, personalization and contextual trust have become essential, allowing businesses to build stronger relationships with their customers while ensuring security and efficiency in every transaction.
To read the report in its entirety, click here.
NEACH - New England Automated Clearing House Association is a neutral, member-focused advocate. Our role is to give you the intelligence, context, and connections you need to make informed strategic decisions. We bring together industry leaders, policymakers, and innovators so you can evaluate innovation through the lens of your institution’s mission and market strategy. For more information, visit neach.org.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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