In 2007, one financial research report stated that 70% of the 11 billion B2B transactions in the United States were still being paid with paper checks. By the end of 2018, however, that number may be reduced to just 10 percent.
So it is clear which way the industry is trending – yet many B2B firms have yet to fully embrace the speed, convenience and cost-savings of electronic payment processing solutions – even as more than 80% now receive payments from their customers through some form of ACH, wire transfers or purchasing cards.
Why has this shift been so gradual, particularly among small and midsized companies?
Perhaps there is still a comfort level attached to checks, especially for business people who for decades knew no other way of handling payments. Some still believe that checks are simply a better option – and less expensive too. According to NACHA, however, when you add up the costs of labor, ink, time and stamps, every check can cost as much as $10.
Another hurdle is the perceived short-term cost of making the transition to electronic payment processing, and the difficulty associated with installing and learning how to use a new system. What will it take to bring a new accounting method up to speed? What is involved with enabling a platform to process fees tied to transactions? Many believe they don’t have the technological expertise to implement a new system.
But all of these objections dissolve on closer inspection. Today’s electronic payment solutions are simple to use, adapt easily to accounting and ERP software, and rapidly achieve ROI while generating long-term savings at every type of business.
In addition, these companies will gain greater cash flow visibility and faster access to payment funds compared to paper checks. Transactions are more secure as well.