Key Takeaways
- The ACH Network is a crucial but often overlooked payment system, processing billions of transactions worth trillions annually.
- Four key pressures—speed expectations, fraud accountability, data richness, and legacy technology—challenge ACH operations.
- Arun Kumar recommends modernizing ACH by transitioning to a canonical payment model, adopting event-driven processing, and integrating fraud checks.
- He advocates for APIs to enhance ACH accessibility and suggests incremental modernization over major overhauls.
- Despite challenges, ACH will continue to grow due to its cost-effectiveness and reliability, benefiting banks that treat it as part of a unified payments hub.
Table of contents
The quiet giant of American payments
The ACH Network is the most important payment system most consumers never think about. In 2025 it carried 35.2 billion payments worth $93 trillion, up almost 5% in volume and nearly 8% in value over 2024, according to Nacha. Payroll, mortgage payments, tax refunds, insurance claims and supplier invoices all ride on it.
Yet the rail’s core design dates to the 1970s: fixed-width files, batch windows and settlement measured in hours or days. For Arun Kumar, an IT consultant and enterprise solution architect with 20 years in banking and payments, that contrast is the opportunity. “ACH is not going away; it is growing,” he says. “The question for every bank is whether its ACH platform is an asset it can build on or a liability it keeps patching.”
His recommendation is direct. Banks should stop treating ACH as a back-office utility and modernize it as a strategic, data-rich, real-time-ready rail.
Four forces reshaping ACH
Kumar sees four pressures converging on ACH operations at the same time.
Speed expectations. Same Day ACH reached 1.4 billion payments and $3.9 trillion in 2025, growing faster than the network overall. Meanwhile RTP and FedNow have taught corporate treasurers that money can move in seconds. ACH platforms built around a single nightly cycle cannot keep pace with multiple daily windows and intraday liquidity demands.
Fraud accountability. Nacha’s new fraud monitoring rules took effect in two phases this year: March 20, 2026 for the largest participants and June 19, 2026 for everyone else, per the Nacha Operating Rules. Originators, third-party senders and receiving banks now need risk-based processes to detect payments that are unauthorized or induced under false pretenses, such as business email compromise and vendor impersonation.
Data richness. Fedwire’s move to ISO 20022 in 2025 raised the bar for structured remittance data. Corporates now ask why their ACH payments still carry 80-character addenda while wires carry full, structured detail.
Legacy technology. Many ACH engines run on aging mainframe code, maintained by a shrinking pool of specialists, with fraud, sanctions and returns handled in disconnected systems.
Arun Kumar’s recommendations
Drawing on work across ISO 20022, SWIFT, ACH/NACHA, Fedwire, RTP and FedNow, Kumar recommends a five-part blueprint.
- Build a canonical payment model. Translate NACHA files into an ISO 20022-aligned internal format at the edge. “Once ACH, wire and instant payments share one data model, you can route, screen and report on them through one set of services,” Kumar explains. The NACHA file stays as the network interface, not the system’s foundation.
- Move from batch to event-driven processing. Process each entry as an event as it arrives, then assemble files only when a window closes. This lets banks support every Same Day ACH window without rework and gives customers real-time status.
- Embed fraud and sanctions in the flow. Run account validation, behavioral analytics and OFAC screening on each entry before release, not after posting. Kumar’s view is that the new Nacha rules should be met with shared, rail-agnostic risk services rather than another standalone ACH tool.
- Open ACH through APIs. Give corporate clients APIs to initiate payments, query status and receive returns and notifications of change. That brings ACH closer to the experience customers already get from instant rails.
- Modernize incrementally. Kumar advises against a big-bang core replacement. Wrap the legacy engine, carve out returns, exceptions and reporting first, and retire old components as each new service proves itself.
“Modernization is not about chasing the newest rail,” Kumar says. “It is about making every rail, ACH included, run on the same intelligent foundation.”
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The ACH road ahead
ACH will keep growing because it is cheap, reliable and universal. Business-to-business ACH alone reached close to 8.1 billion payments in 2025, up nearly 10%. The banks that win this volume will be those whose platforms treat ACH as one channel in a unified, real-time-ready payments hub.
Kumar’s advice to payments leaders is to start with a clear target architecture and a 12-to-18-month roadmap of measurable wins: faster returns handling, cleaner fraud signals, richer data for clients. “The rail is fifty years old,” he says. “Your ACH platform does not have to be.”
