Digital Payment Methods – Transitioning Your B2B Customers Part 1

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Fewer and fewer consumers are paying by check, but many businesses continue to do so. In this three-part series, let's consider the issues surrounding the use of paper checks, explore the alternatives, and offer some suggestions for transitioning your B2B (Business to Business) customers to digital payment methods.

As a consumer, when was the last time you paid for anything by check? It no longer seems convenient or even advisable to carry a checkbook around with you. But what about paying for expenses for your business or collecting payment from your customers?  91% of finance tech leaders say their organizations are still receiving check payments from their customers. Does it matter? Are there good reasons to transform to digital payment methods? We believe there are. Let's explore those reasons.

Digital payments are the future, and adoption will increase exponentially this decade.


Commercial check usage fell to an all-time low in the first quarter of this year, with the Federal Reserve reporting nine hundred million checks collected. There has been a  steady decline since the early 2000s. Nine hundred million might seem significant, but it's a small fraction of the over four billion checks registered at the beginning of 2000.

So the trend is clear. Still, many organizations are bound to the use of paper checks, which makes it difficult for businesses to transition to totally digital payment methods. Sooner rather than later, check usage will be untenable.

When you accept digital payments, your business can experience improved accounts receivable efficiency,  accelerated cash flow, and enhanced customer convenience.

In a world becoming increasingly digital, now is the time to take proactive measures and explore the possibilities offered by the digital transformation of your payment processing methods. The key to successful transitioning will be to introduce technology that integrates digital payment acceptance into your existing processes while allowing you to continue accepting checks when necessary.

What's the matter with checks?

Checks are becoming obsolete. Yet, habits die hard, and some businesses are resistant to change. Check usage has declined for various reasons. Here are a few:

  1. Check processing is expensive

According to Bank of America, the cost of processing a single check is between $4 and $20. ACH (Automated Clearing House) payments are much less expensive to process. Payment processors generally charge a flat fee of $0.25 to $0.75 or a flat percentage of 0.5%–1% per transaction.

Manually processing checks also involves employee time and resources. The additional labor involved—from lockbox services to frequent bank trips—increases the already considerable expense. Costs increase exponentially if you receive a large volume of your payments by check.

  1. Checks are subject to mail delays

You and your customers hate being at the mercy of the postal service. USPS can take up to four or five days for first-class mail. There is no guarantee that checks will arrive on time. During storms and other emergencies, payments may be further delayed or even lost.

The unpredictability of mail delivery ultimately hinders cash flow, giving finance teams good reason to prioritize digital payments.

  1. Checks are subject to fraud

Check fraud happens more often than you think. Actually, checks are the most targeted payment method for fraudulent activity, representing 66% of methods subject to attempted and actual payment fraud.

Most banks are vigilant about mitigating attempted check fraud, but funds may remain inaccessible to your business pending a review process.

  1. Checks require on-premise processing

Perhaps the most significant challenge checks pose for accounting departments in a post-COVID world is their reliance on in-office teams.

Many businesses continue to operate remotely. Accepting check payments means someone on your team must commute to the office just to pick up mail-delivered checks.

The sporadic nature of these trips only further delays the logging of those payments. It's inconvenient for everyone, from the runner to your accounts receivable (AR) team, to your customers whose payments may be late.

Have we convinced you that paper checks are quickly becoming obsolete? But don't worry, in parts 2 and 3 of this series, we'll be discussing the various options for digital payments and how you and your customers can comfortably make the transition.

Contact our experts at Versapay and let us show you how streamlined payment processing can benefit you and your customers.

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