Non-Bank ACH Originators

Part
01
of six
Part
01

Non-Bank ACH Originators - Rows 82-101

Non Bank ACH originators in the United States include Constellation Brands, Weyerhaeuser, Keurig Dr Pepper, Magellan Health, and Fortive. The requested information has been entered into row 82 to 101 of the attached spreadsheet.

NON BANK ACH ORIGINATORS

RESEARCH STRATEGY

To determine non-bank ACH originators, we first searched for information to identify leading US companies by reviewing news and industry sources such as Fortune. We made sure that our search does not include banking entities. To find the originators with higher revenues we selected companies that had revenues exceeding $1 billion that effectively ranked them among leading US companies. Based on extensive research, we provided information on twenty select companies that fit the profile of our research in the assigned spreadsheet rows 82-101. We included information regarding the twenty select companies company website, ACH proof, annual revenues on the provided spreadsheet.
Part
02
of six
Part
02

Non-Bank ACH Originators - Rows 62-81

Non Bank ACH originators in the United States include Veritiv, Frontier, Eversource, and Masco. The requested information has been entered into row 62 to 81 of the attached spreadsheet.

NON BANK ACH ORIGINATORS

RESEARCH STRATEGY

To determine non-bank ACH originators, we first searched for information to identify leading US companies by reviewing news and industry sources such as Fortune. We made sure that our search does not include banking entities. To find the originators with higher revenues we selected companies that had revenues exceeding $1 billion that effectively ranked them among leading US companies. Based on extensive research, we provided information on twenty select companies that fit the profile of our research in the assigned spreadsheet rows 62-81. We included information regarding the twenty select companies company website, ACH proof, annual revenues on the provided spreadsheet.
Part
03
of six
Part
03

Non-Bank ACH Originators - Rows 42-61

Non-Bank ACH originators in the United States include Ford Motors, General Motors, UnitedHealth Group, Cardinal Health, Verizon Communications, Phillips 66, Procter & Gamble, FedEx, Archer Daniels Midland, Pfizer, Mondelez International, Eli Lilly, Marriott International, WellCare Health Plans, Kohl's, Occidental Petroleum, Kimberly-Clark, CarMax, HollyFrontier, GameStop. All the requested information have been included in the spreadsheet.

FINDINGS


RESEARCH STRATEGY

To determine non-bank ACH originators, we first searched for information to identify leading US companies by reviewing news and industry sources such as Fortune. We made sure that our search does not include banking entities. To find the originators with higher revenues we selected companies that had revenues exceeding $1 billion that effectively ranked them among leading US companies. Based on extensive research, we provided information on twenty select companies that fit the profile of our research in the assigned spreadsheet rows 42-61. We included information regarding the twenty select companies company website, ACH proof, annual revenues on the provided spreadsheet.
Part
04
of six
Part
04

Non-Bank ACH Originators - Rows 22-41

Non Bank ACH originators in the United States include Paypal, Oracle, IBM, Stripe, Salesforce, Microsoft, Disney, Netflix, Intuit Quickbooks, Square, and Shopify. Additional leading US companies that are non Bank ACH originators include Moneygram, Comcast, Google, Hewlett Packard, Exxon Mobil, CVS health, AT&T, McKesson, and Walgreen's.

FINDINGS

  • Fortune 500 ACH originators include IBM, Oracle, Microsoft, Sales Force, Disney, Paypal, Netflix, Intuit, Comcast, Google, Hewlett Packard, Exxon Mobil, CVS health, AT&T, McKesson, and Walgreen's.
  • Other leading US companies that are ACH originators include Moneygram, Stripe, Square, and Shopify

Research Strategy

In order to determine non-bank ACH originators, your research team first sought to identify leading US companies by reviewing news and industry sources such as Fortune and Forbes. Critically, we restricted our search to companies that were non-bank entities that had not been identified in your other current projects. Importantly, your research team selected companies that had revenues exceeding $1 billion that effectively ranked them among leading US companies. Your research team engaged in sophisticated search strategies to identify whether companies identified from our preliminary research were ACH originators. Importantly, we provided information on twenty select companies that fit the profile of our research in the assigned spreadsheet rows 22-41. We included information regarding the twenty select companies company website, ACH proof, annual revenues, and number of ACH transactions on the provided spreadsheet.
Part
05
of six
Part
05

Non-Bank ACH Originators - Rows 2-21

The top 20 Automated Clearinghouse (ACH) originators by volume for 2018 are provided in rows 2-21 of the attached spreadsheet.

Top ACH Originators

  • Wells Fargo & Company originated 5,863,675,291 ACH transactions in 2018.
  • JP Morgan Chase originated 4,135,738,958 ACH transactions in 2018.
  • Bank of America Corp originated 2,650,845,132 ACH transactions in 2018.
  • Citigroup originated 1,078,552,351 ACH transactions in 2018.
  • U.S. Bancorp originated 750,628,837 ACH transactions in 2018.
  • The Bancorp Bank, although publicly traded, did not report revenue, but instead reported net income. We did not include it in the spreadsheet since it was not a direct comparison to other data include there. However, we can report here that the 2017 net income was $21,673,000.
  • MUFG Union Bank is a subsidiary of MUFG and the financial reports did not break out income or revenue for individual subsidiaries. Therefore, we marked N/A in the spreadsheet. We can report that that total interest and non-interest for MUFG (which includes Union Bank) was ¥5,408,623 million (¥3,813,379 million[interest income] + ¥1,595,244 million [non-interest income]). Using the exchange rate as of 3/31/2019, which is the date of the reported income, this is equivalent to $48.8 billion (5408623 million/110.94).
  • Deutsche Bank Trust Company Americas reported net income rather than revenue so we did not include it on the spreadsheet. However, the most recent reported net income, as of 3/31/19, was $171,000,00. A link to the data as well as a screenshot are provided on the Google doc as the actual link would not work correctly due to captcha requirements.

Research Strategy

The majority of the revenues provided are actual 2018 revenues based on publicly available information. However, First Premier Bank, BMO Harris Bank, and First National of Nebraska have estimated revenues due to a lack of publicly available data.




Part
06
of six
Part
06

Non-Bank ACH Originators - Rows 2-21 (Updated)

Twenty of the top non-bank Automated Clearing House (ACH) originators have been entered on the attached spreadsheet. The largest by revenue is Walmart, followed by Apple, Amazon, Home Depot, and Dell for the top five.

FINDINGS

RESEARCH STRATEGY

To find 20 of the top non-bank automated clearing house (ACH) originators, we began by understanding what a non-bank originator is. Using the 2018 Consumer ACH Origination Guide, we were able to determine that ACH non-bank originators are merchants, as the guide stated, "The Originator is the merchant. They have the 'contract' with the Receiver." Therefore, we understood that we were looking for the top merchants that originate ACH transactions. However, we also located a document called the Third Party Payment Processors Job Aid, which indicates that third party payment processors "originate transactions for consumers or businesses that are not direct customers of the originating financial institution." Further, this document indicates that TPPPs act on behalf of originators. Therefore, we understood that merchants are the originators and TPPPs act on behalf of these originators, but are not actually originators themselves.

Then, we sought to further understand what an ACH transaction is. We discovered that ACH is "the process of moving electronic funds between bank accounts." ACH can also be referred to as EFT (Electronic Funds Transfer) or e-check. Essentially, a merchant converts paper checks to ACH transactions or initiates ACH transactions using the consumers' bank account information. Merchants are required to notify consumers if they convert paper checks to ACH funds. In addition, companies that offer branded debit cards, such as Target, use ACH to pull funds directly from consumers' bank accounts.

We further discovered that merchants that allow consumers to use PayPal as a form of payment initiate ACH transactions through PayPal. Then, when a "transaction is made through Paypal, Paypal acts as the depositor in the ACH debit transaction. Even in the case of a third-party application process, an ACH Paypal debit can occur through the Paypal API when an electronic request is made to a financial institution requesting funds or making a deposit." Therefore, we concluded that merchants that accept Paypal are also non-bank ACH originators.

At this point, we were able to identify 20 merchants that act as non-bank ACH originators based on their annual revenue. Unfortunately, we were unable to determine or triangulate the volume of ACH transactions each merchant initiates on an annual basis. We first searched for a registration database for non-bank ACH originators. According to NACHA, 9,403 third-party ACH senders had registered with the NACHA by the March 1, 2018 deadline. However, this appears to only apply to Originating Depository Financial Institutions (ODFIs), which are "banks and credit unions," and their third-party senders (TPS). There does not appear to be a registration requirement for merchant originators. When searching for what constitutes a TPS, we found that it is a complicated process to determine whether an entity qualifies as a TPS or not, but from the video on this page, we believe it refers to a third-party service provider that acts as an intermediary between an ODFI and a merchant. As such, even though we found a list of top 50 originators in 2018 (which were all banks), we do not believe a top list of merchants that act as non-bank ACH originators exists.

We then turned to media reports from business publications like Forbes, The Economist, and Inc., along with publications from payment-related websites like NerdWallet, PayPal, Fundera, and more to see if we could locate any mentions of how many ACH transactions merchants make in a year. This was an attempt to find directly available numbers for some of the top merchants, but it was also kept in mind as a way to possibly triangulate the numbers. For instance, if we could have found how many total ACH transactions were made, we might be able to use the revenues of the top 20 originators to calculate a proportion of ACH transactions for each merchant. Unfortunately, all we found was the overall volume of ACH transactions, which include those originated by banks. There is information about how each segment of ACH transactions has grown and how much each segment processed, but this was not broken out by merchants or other types of originators. We believe that many merchant ACH transactions fall under "Same-Day" transactions and Internet transactions, we could not confirm this and therefore, could not produce a reliable volume for non-bank originators, even for triangulation purposes.

Finally, we looked into press releases from each of the top 20 non-bank originators that we identified to see if any of them indicated how many ACH transactions were made in the past year. While there was plenty of information on sales and revenue for all companies identified here, there was no breakdown of how consumer payments were made. We also searched through all public companies' annual reports to determine if a breakdown by payment type was available, but this does not appear to be a category companies include in their reports. Therefore, we entered "N/A" in column E for the volume of ACH transactions on the attached spreadsheet.
Sources
Sources

From Part 02
From Part 03
From Part 05
From Part 06