Businesses Are Transitioning Away from Checks to Digital Payments, Report Shows
Paper checks continue to be the most popular form of business-to-business (B2B) payment. However, more companies are looking to make the transition toward digital payments than ever before, according to a recent report from the Association for Financial Professionals (AFP).
Fewer paper checks are being processed today than reported in 2015, and ACH transactions have doubled in the last six years, the report reads. 73% of organizations that participated in the survey say they plan to move away from paying by check to paying digitally.
"It's clear the thought process around business payments continues to evolve. While paper checks remain a popular payment method in B2B payments, the pandemic has accelerated a major shift and pushed companies toward fully automating payments," said John Coughlin, President of Corpay, a FLEETCOR Company.
Businesses are also becoming more aware of the high costs associated with paper checks, AFP says. The price to issue and receive paper checks has remained between $1-$4 since 2015, while ACH transactions cost between $0.26-$0.50, the report says.
"The findings of this survey confirm that paper checks to continue to be considerably more expensive than some electronic payment methods." Said Jim Kaitz, president and CEO of AFP. "As the coronavirus pandemic unfolded, companies sought more streamlined and efficient payments processes, which accelerated the transition to digital payments. It will be interesting to see how payment types evolve as the pandemic continues and new real-time payment rails become more established."