53% of Check-Based Firms Put Digital Payments on Fast Track

More organizations are getting fed up with slow, paper-based payments and instead fast-tracking their adoption of digital alternatives.

PYMNTS research shows that 53% of businesses that use checks have been making and receiving fewer check payments since prioritizing payments digitization. Among firms that use cash, 87% are doing so less often, according to “Reimagining Business Payments,” a PYMNTS and Billtrust report.

Get the report: Reimagining Business Payments

Statistics show that businesses are open to new ways to pay and be paid. A May study suggested that 93% of businesses would try at least one new payment method within the next year and reported that 63% already had tried a new payment method since March 2020.

Adopting More Digital B2B Payment Methods

Buyers and suppliers have relied on inefficient accounts receivable (AR) and accounts payable (AP) processes for years because they’ve been limited by legacy software and systems that don’t offer the interoperability their businesses and partners increasingly demand.

This often results in delayed B2B payments, errors, fraud, a lack of payment data, cash flow challenges and other problems that can prevent companies from delivering the type of instantaneous financial transactions that are fast becoming table stakes in nearly every vertical.

“Businesses have always struggled with B2B payments, especially in the United States where more than half the payments are still done through paper check,” Billtrust CEO Flint Lane told PYMNTS in an interview.

Read more: At Last, the Check’s Not ‘in the Mail:’ Digital Lockboxes Tackle B2B Payments Mail Float Problem

To address those inefficiencies, they’re adopting new technologies. Notably, PYMNTS’ research has found that credit card-enabled digital payments made via supplier portals or digital wallets have experienced the largest increase in usage of any payment type since the pandemic began.

Using cards, portals and other tech can help enterprises keep a tighter rein on their payments flows. Ninety-one percent of chief financial officers (CFOs) said accelerating their organization’s payments digitization has made payment operations more efficient, and 96% said they believe optimized AR and AP processes are highly important to maintaining healthy balance sheets.

Securing Digital Payments With Digital Lockboxes

Research shows that digital lockboxes are becoming an important tool for making sure those payments are secure.

A digital lockbox essentially serves as a central clearinghouse that can automate and process payment remittance information from direct and indirect channels, such as email, phone, AP portals and self-service portals. Digital lockboxes offer speed, security and interoperability, giving both buyers and suppliers a way to align payment choice and streamline payments via one integration across multiple providers, card issuers, banks and business software platforms.

Using a digital lockbox as a central collection and distribution point can improve overall customer satisfaction, cut down on manual processes, increase back offices’ flexibility, improve financial processes and lead to more effective problem solving.

Digital lockboxes can help organizations not only track and expedite AR and AP processes, but also optimize both sides of the transaction. Otherwise, the status quo of slower payments and cash application will stay slow — and that fact alone may well be enough to persuade prospective customers to take their business elsewhere.