U.S. Companies Continue to Make B2B Payments by Check - AFP Survey

Nov 13, 2013, 08:00 ET from Association for Financial Professionals

Clues can be found among payment formats, standards, corporate customers and suppliers

BETHESDA, Md., Nov. 13, 2013 /PRNewswire/ -- U.S. companies cling to checks as their main method of business-to-business (B2B) payment, according to a report released today by the Association for Financial Professionals (AFP). The report demonstrates overall use of paper checks is on the decline, while corporate interest in mobile payments continues to grow.

The 2013 AFP Electronic Payments Survey, underwritten by J.P. Morgan Treasury Services, collected responses from more than 450 financial professionals in September 2013. Survey findings highlight trends, identify best practices and reveal solutions for advancing automation of B2B payments. 

Wire payments and ACH payments are being adopted at a slower rate than in the recent past, as paper checks now can be converted directly into images or ACH debits. Meanwhile, the use of mobile payments at the corporate level is becoming increasingly popular, providing U.S. businesses with an expanding range of payment choices as they migrate from paper to electronic methods.

"The typical organization makes half its B2B payments by check, down from 81 percent in 2004," said Jim Kaitz, AFP's president and CEO.  "AFP strongly supports electronic payments and we're pleased to see the payment innovations now available to corporate treasurers."

Respondents identified a number of reasons why companies are often reluctant to adopt electronic payments methods:

  • 82 percent experience difficulty convincing customers to pay electronically
  • 74 percent have difficulty convincing suppliers to accept e-payments
  • 71 percent found a shortage of IT resources for implementation
  • 70 percent have a lack of standard format for remittance information with 66 percent acknowledging a lack of integration between electronic payment and account systems

"This year's survey affirms the multitude of barriers that practitioners face when attempting to adopt new electronic payment trends," said Diane Quinn, Managing Director and Global Large Corporate Sales Executive, J.P. Morgan Treasury Services. "Practitioners who overcome these challenges and break through the status quo of limited electronic payment adoption are well positioned to achieve renewed growth, improved fraud control and efficiency gains."

Additional findings highlight trends related to cross currency payments and remittance preferences:

  • When making cross-currency payments, contractual requirements and the size/type of transaction are key considerations when a company selects a payment method
  • Email is the delivery method most frequently used to deliver and receive remittance information tied to organizations' ACH payments
  • 78 percent of organizations have integrated their ACH systems with accounting while 56 percent have done so for card payments
  • A number of companies are evaluating use of mobile payment tools in the next three years in the following areas:
    • Reviewing payments sent or received (cited by 37 percent of respondents)
    • Reviewing balance and other payment information (37 percent)
    • Approving payments (36 percent)

Download complete findings via www.afponline.org/epayments

AFP conducts a comprehensive electronic payments survey every three years.  In September 2013, AFP sent a 35-question survey to its corporate practitioner members with job titles of cash manager, director, analyst and assistant treasurer. The survey generated a total of 484 responses, which are the basis of the 2013 report. 

Headquartered outside Washington, D.C., the Association for Financial Professionals (AFP) is the professional society that represents finance executives globally. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in finance. The quarterly AFP Corporate Cash Indicators serve as a bellwether of economic growth. The AFP Annual Conference is the largest networking event for corporate finance professionals in the world.

AFP, Association for Financial Professionals, Certified Treasury Professional, and Certified Corporate Financial Planning & Analysis Professional are registered trademarks of the Association for Financial Professionals.

SOURCE Association for Financial Professionals