ACH, of course, was created to handle direct deposits and then branched into recurring bills. Outsourcing was the preferred means of delivery, since the volume wasn't large enough to go in-house except for the largest banks, Fundtech said.

But now the ACH network is handling growing volumes of Internet-based e-commerce transactions and converted checks from accounts receivables operations, growth expected to be accelerated even further by mobile payments, New Jersey-based Fundtech said.

The opportunity for a revenue stream from that new business has created a market opportunity for mid-size banks and credit unions to get into the ACH business on an in-house basis, the company said.

That market opportunity prompted Fundtech earlier this year to get into ACH transaction processing by purchasing the origination and back-office solutions business from TROY Group.

"We acquired a fair number of employees and customers and then configured it a little bit, enhanced it and are now marketing it as OrigiNET," said George Ravich, executive vice president and chief marketing officer for Fundtech.

"The ACH business is growing by leaps and bounds right now, going down market to smaller and smaller businesses," Ravich said. "With Check 21 and back-office conversion, even the local flower shop guy with just a few stores and under a million in revenue is scanning checks in the back office and sending them in to be changed to ACH transactions. That's why this is growing 20% a year."

Serving small businesses is seen as a brass ring for a lot of credit unions, too, and that's why Mid-Atlantic Corporate, which already provides ACH origination services to about 250 credit unions, seized the opportunity to go first with OrigiNET after its existing ACH provider shut down the version Mid-Atlantic was running.

"We did our due diligence, looked at several demonstrations and talked to users of it under the TROY name, and we've had a long relationship with Fundtech, using their wire products, so we're not at all concerned with going first with OrigiNET and ACHPlus," said Drew Kishbaugh, Mid-Atlantic Corporate's senior vice president of payment services.

"With the volume of ACH transactions steadily increasing and the business services offered by our members, we needed a system that's efficient and scalable and easy to set up and use day to day," he said.

Mid-Atlantic expects to go live with the browser-based solutions in September, spending the summer working with Fundtech to write a script to convert data from its existing database product.

The new system is more compatible with Mid-Atlantic's SQL-based infrastructure and provides the corporate, the natural person credit union and the end users themselves with security settings and flexibility the corporate couldn't offer before, Kishbaugh said.

As for potential revenue, Fundtech said a typical company pays $40 to $50 per month to maintain an ACH account with a financial institution and another $40 for Web access and debit and credit transaction fees of 14 cents and 25 cents each, respectively.

So if a retailer sends 4,000 ACH debits and 1,000 ACH debits per month, the credit union or bank gets about $900 a month in revenue. But about half of that typically goes to the ACH outsourcer, revenue that can be kept at home with an in-house solution, Fundtech said.

Those also are savings that can be passed along, making it more feasible for credit unions to offer to small businesses the ACH services that were available primarily only from big banks.

"That is the intent of the origination system we bought," said Kishbaugh at Mid-Atlantic. "We're going to make it easier for our credit unions to offer business services to business members whether they're big or small. Whether they want to originate payroll or employee reimbursement or whatever they want to do, they can do that in this controlled environment in a way that helps drive down costs."

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