Legacy Payments: A Mounting Liability for Businesses<\/h2>\n
Dependency on paper checks is more than just outdated. It is unleashing a cascade of financial and operational vulnerabilities that businesses can no longer afford to ignore.<\/p>\n
Business check fraud persists at alarming levels.<\/h3>\n\n\n\nDespite the widespread digital transformation, check fraud<\/a> remains the most prevalent fraud threat to businesses today. According to the Association for Financial Professionals, 65% of companies reported actual or attempted check fraud incidents in 2023. Large firms faced the greatest exposure, with 72% of billion-dollar companies affected. Even smaller companies faced a coin flip\u2019s chance of confronting check fraud, with 52% reporting attempted or actual incidents. Digital payments could eliminate these risks, yet 75% of survey respondents said their companies continue to use paper checks to conduct business-to-business (B2B) transactions.<\/p>\n<\/div>\n\n72%<\/h2>\n
Share of companies with more than $1 billion in revenue targeted by check fraud<\/a><\/strong> in 2023<\/p>\n<\/div>\n<\/div>\n<\/div>\nTraditional payment methods disrupt business efficiency.<\/h3>\n
Among mid-sized businesses in the United States, checks remain the most popular payment method. Seventy-one percent of these firms\u2019 AP departments issue paper checks<\/a> to suppliers, with 80% sending them through the mail without tracking<\/a>. The consequences extend beyond efficiency. With 38% of firms experiencing payment-processing delays and 37% watching checks vanish<\/a> in transit, AP\u2019s paper dependency undermines buyer-supplier relationships and compromises business continuity.<\/p>\nKey industries remain tethered to legacy AP payments.<\/h3>\n
The construction industry leads in paper-check usage, with 76% of subcontractors paid this way. Real estate (21%) and retail (15%) also maintain reliance on paper checks for B2B payments<\/a>. In other words, even as digital payment options multiply, sizable segments of the economy still have their B2B payments firmly anchored in the last century\u2019s payment methods. The critical question is not whether they will modernize but whether they will remain competitive when they eventually must do so.<\/p>\nDigital Payments Improve Financial Health and B2B Relationships<\/h2>\n
Digitalizing payments not only enhances cash flow but also slashes costs and strengthens buyer-supplier relationships.<\/p>\n
Digital payments can help businesses improve their financial health.<\/h3>\n\n\n\n92%<\/p>\n
of firms believe B2B transactions<\/a><\/strong> could benefit from digital or instant payments.<\/p>\n<\/div>\n\nWith slow, fraud-prone payments such as paper checks costing firms heavily and placing a drag on their cash flow, many are seeking solutions. Adopting faster, digital payments can help businesses boost their cash flow management<\/a>, a priority for 55% of firms, according to a survey published by the Federal Reserve. The survey found that 92% of firms believe B2B transactions could benefit from digital or instant payments. These payment methods can enhance businesses\u2019 financial health in several ways. By offering immediate access to funds and real-time notifications, faster digital and instant payments can allow businesses to reduce days sales outstanding (DSO) and recognize positive cash flow more quickly. They also improve working capital management through faster access to incoming payments. Finally, they enhance visibility into cash positions with instant notifications when funds are available.<\/p>\n<\/div>\n<\/div>\n<\/div>\nAdopting digital payment solutions can also lead to cost savings through both increased efficiency and, importantly, better fraud prevention. According to Federal Reserve data, 48% of businesses expect to lower their overall costs by using and accepting faster or instant digital payments. Moreover, 1 in 5 say their top motivation for implementing these payments is enhanced security and fraud protection through greater traceability and control.<\/p>\n
Digital payments also smooth the way to better customer experiences and B2B relationships.<\/h3>\n
One of the most important advantages of digital payments is that they enable businesses to meet evolving customer expectations<\/a>. The same Federal Reserve survey found that 39% of businesses are turning to faster and instant payments because they want the flexibility to send and receive payments in the ways that work best for their customers. Offering digital payment options improves customer satisfaction and can lead to increased revenues and new customer relationships. Embedded digital payments, in particular, are being used to ensure a smooth and fast customer payment experience.<\/p>\nBy embracing digital payment methods, businesses can strengthen their financial health through better cash flow management, reduced costs, enhanced customer experiences and new revenue streams. This shift aligns with the growing trend toward the \u201cconsumerization\u201d of business transactions and positions companies to meet the demands of today\u2019s digital-first customers and partners.<\/p>\n
Overcoming Obstacles to B2B Payments Modernization<\/h2>\n
Businesses are rapidly shifting to a digital mindset when it comes to their B2B payments. Although challenges remain, digital payments are becoming a fundamental requirement for businesses to stay competitive in the evolving marketplace.<\/p>\n
Digital payments adoption is on the rise.<\/h3>\n\n\n\nWith benefits including improved efficiency, security and B2B relationships, businesses are rapidly embracing new forms of digital payments. According to a U.S. Bank survey, 51% of companies are using instant payments<\/a> in 2024, with this figure expected to rise to 80% by 2026.<\/p>\nThe study also noted a growing interest in embedding payments into existing systems, including back-office tools and customer-facing applications. Embedded payments offer seamless integration within AP automation solutions, streamlining financial operations. Embedded payments are set to vault from 37% today to 80% in 2026.<\/p>\n<\/div>\n
\n67%<\/h2>\n
Projected growth in B2B virtual card usage<\/a><\/strong> over next 12 months<\/p>\n<\/div>\n<\/div>\n<\/div>\nVirtual cards<\/a> are projected to be the fastest-growing B2B payment method by global transaction value. Juniper Research forecasts that virtual card transactions will grow from $3 trillion in 2024 to $11 trillion by 2028. PYMNTS Intelligence research also indicates that virtual card usage<\/a> is poised to surge 67% in the next year.<\/p>\nDigital transformation is within reach, but hurdles remain.<\/h3>\n
Despite these projections and digital payments\u2019 overwhelming benefits, some businesses face obstacles in adopting new payment technologies. According to data from Hokodo, 44% of companies still have problems managing payments.<\/p>\n
Virtual cards, for example, are familiar to 94% of middle-market AP departments<\/a>, yet only 49% have adopted them. PYMNTS Intelligence finds the actual adoption rate much lower. Just 18% of mid-sized firms surveyed have utilized virtual cards<\/a> in the last year. The biggest blockers of usage<\/a> are a lack of understanding of how they work and a concern that their integration into workflows would be overly time-consuming. Some companies also worry that new payment methods would increase their costs. As hesitant AP teams weigh their options, their competitors are already reaping the rewards: robust security, faster settlements, automated reconciliation and strengthened supplier relationships.<\/p>\nThe right partnership can make digital payment ambitions a reality.<\/h3>\n
Despite the widespread digital transformation, check fraud<\/a> remains the most prevalent fraud threat to businesses today. According to the Association for Financial Professionals, 65% of companies reported actual or attempted check fraud incidents in 2023. Large firms faced the greatest exposure, with 72% of billion-dollar companies affected. Even smaller companies faced a coin flip\u2019s chance of confronting check fraud, with 52% reporting attempted or actual incidents. Digital payments could eliminate these risks, yet 75% of survey respondents said their companies continue to use paper checks to conduct business-to-business (B2B) transactions.<\/p>\n<\/div>\n Share of companies with more than $1 billion in revenue targeted by check fraud<\/a><\/strong> in 2023<\/p>\n<\/div>\n<\/div>\n<\/div>\n Among mid-sized businesses in the United States, checks remain the most popular payment method. Seventy-one percent of these firms\u2019 AP departments issue paper checks<\/a> to suppliers, with 80% sending them through the mail without tracking<\/a>. The consequences extend beyond efficiency. With 38% of firms experiencing payment-processing delays and 37% watching checks vanish<\/a> in transit, AP\u2019s paper dependency undermines buyer-supplier relationships and compromises business continuity.<\/p>\n The construction industry leads in paper-check usage, with 76% of subcontractors paid this way. Real estate (21%) and retail (15%) also maintain reliance on paper checks for B2B payments<\/a>. In other words, even as digital payment options multiply, sizable segments of the economy still have their B2B payments firmly anchored in the last century\u2019s payment methods. The critical question is not whether they will modernize but whether they will remain competitive when they eventually must do so.<\/p>\n Digitalizing payments not only enhances cash flow but also slashes costs and strengthens buyer-supplier relationships.<\/p>\n 92%<\/p>\n of firms believe B2B transactions<\/a><\/strong> could benefit from digital or instant payments.<\/p>\n<\/div>\n With slow, fraud-prone payments such as paper checks costing firms heavily and placing a drag on their cash flow, many are seeking solutions. Adopting faster, digital payments can help businesses boost their cash flow management<\/a>, a priority for 55% of firms, according to a survey published by the Federal Reserve. The survey found that 92% of firms believe B2B transactions could benefit from digital or instant payments. These payment methods can enhance businesses\u2019 financial health in several ways. By offering immediate access to funds and real-time notifications, faster digital and instant payments can allow businesses to reduce days sales outstanding (DSO) and recognize positive cash flow more quickly. They also improve working capital management through faster access to incoming payments. Finally, they enhance visibility into cash positions with instant notifications when funds are available.<\/p>\n<\/div>\n<\/div>\n<\/div>\n Adopting digital payment solutions can also lead to cost savings through both increased efficiency and, importantly, better fraud prevention. According to Federal Reserve data, 48% of businesses expect to lower their overall costs by using and accepting faster or instant digital payments. Moreover, 1 in 5 say their top motivation for implementing these payments is enhanced security and fraud protection through greater traceability and control.<\/p>\n One of the most important advantages of digital payments is that they enable businesses to meet evolving customer expectations<\/a>. The same Federal Reserve survey found that 39% of businesses are turning to faster and instant payments because they want the flexibility to send and receive payments in the ways that work best for their customers. Offering digital payment options improves customer satisfaction and can lead to increased revenues and new customer relationships. Embedded digital payments, in particular, are being used to ensure a smooth and fast customer payment experience.<\/p>\n By embracing digital payment methods, businesses can strengthen their financial health through better cash flow management, reduced costs, enhanced customer experiences and new revenue streams. This shift aligns with the growing trend toward the \u201cconsumerization\u201d of business transactions and positions companies to meet the demands of today\u2019s digital-first customers and partners.<\/p>\n Businesses are rapidly shifting to a digital mindset when it comes to their B2B payments. Although challenges remain, digital payments are becoming a fundamental requirement for businesses to stay competitive in the evolving marketplace.<\/p>\n With benefits including improved efficiency, security and B2B relationships, businesses are rapidly embracing new forms of digital payments. According to a U.S. Bank survey, 51% of companies are using instant payments<\/a> in 2024, with this figure expected to rise to 80% by 2026.<\/p>\n The study also noted a growing interest in embedding payments into existing systems, including back-office tools and customer-facing applications. Embedded payments offer seamless integration within AP automation solutions, streamlining financial operations. Embedded payments are set to vault from 37% today to 80% in 2026.<\/p>\n<\/div>\n Projected growth in B2B virtual card usage<\/a><\/strong> over next 12 months<\/p>\n<\/div>\n<\/div>\n<\/div>\n Virtual cards<\/a> are projected to be the fastest-growing B2B payment method by global transaction value. Juniper Research forecasts that virtual card transactions will grow from $3 trillion in 2024 to $11 trillion by 2028. PYMNTS Intelligence research also indicates that virtual card usage<\/a> is poised to surge 67% in the next year.<\/p>\n Despite these projections and digital payments\u2019 overwhelming benefits, some businesses face obstacles in adopting new payment technologies. According to data from Hokodo, 44% of companies still have problems managing payments.<\/p>\n Virtual cards, for example, are familiar to 94% of middle-market AP departments<\/a>, yet only 49% have adopted them. PYMNTS Intelligence finds the actual adoption rate much lower. Just 18% of mid-sized firms surveyed have utilized virtual cards<\/a> in the last year. The biggest blockers of usage<\/a> are a lack of understanding of how they work and a concern that their integration into workflows would be overly time-consuming. Some companies also worry that new payment methods would increase their costs. As hesitant AP teams weigh their options, their competitors are already reaping the rewards: robust security, faster settlements, automated reconciliation and strengthened supplier relationships.<\/p>\n72%<\/h2>\n
Traditional payment methods disrupt business efficiency.<\/h3>\n
Key industries remain tethered to legacy AP payments.<\/h3>\n
Digital Payments Improve Financial Health and B2B Relationships<\/h2>\n
Digital payments can help businesses improve their financial health.<\/h3>\n
Digital payments also smooth the way to better customer experiences and B2B relationships.<\/h3>\n
Overcoming Obstacles to B2B Payments Modernization<\/h2>\n
Digital payments adoption is on the rise.<\/h3>\n
67%<\/h2>\n
Digital transformation is within reach, but hurdles remain.<\/h3>\n
The right partnership can make digital payment ambitions a reality.<\/h3>\n