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The State of B2B Payments

Earlier this week, President Obama delivered his penultimate State of the Union address.  Whether you agree with his assessment of our country’s condition or the future he envisions for it, the practice of looking back and analyzing where we were, where we’ve come, and where we’re going is a productive exercise.  In this spirit, we thought it a good time to take a look at B2B payments, their past, present, and future.

Historically, check payments own the B2B market.  In 2004, 81% of B2B payments were made by check.  Today that number is down to 50%, according to a survey by the Association for Financial Professionals.  But within this figure the survey notes there is a difference between large companies (those with revenues exceeding $1 billion) and smaller organizations.  Larger businesses process only 40% of their B2B payments by check, while these smaller companies pay 63% of their payments by check.  Larger organizations use wire transfers and ACH payments more than their smaller counterparts.  Wire transfers are often too expensive for small companies, as too are ACH payments.

Both wire and ACH are also more difficult for small businesses to convince vendors and customers to use.  In fact, 82 percent of survey respondents indicated that they do not use electronic payment methods because they can’t get customers to pay that way.  74 percent said suppliers too won’t pay electronically.

Here in lies the issue facing B2B payments.  While check payment loses its hold on the market, what is taking its place?  The answer is many things.  ACH payments, wire, credit card, debit card, and EFT payments all make up the other 50%.  This causes issue as all companies use different methods and thus require and request separate payment methods.  The payment field is becoming fractured.

But there are benefits to electronic payments.  Cost savings, improved cash forecasting, and fraud control were all noted as benefits of electronic payments.  The question then is will one of the before mentioned methods rise above the rest to become a ubiquitous tool, providing not only the savings and security of electronic payments, but the ease of use and acceptance that checks have had for so many decades?

We do not feign to know the answer to this question (we are not soothsayers after all), and since we don’t, we have worked to make it easier to use any of these methods.  PrintBoss enables you to create checks, ACH files, and even virtual credit card payments with a click of a button.  The key is flexibility and PrintBoss provides that.

What will the B2B payments landscape look like in the future?  Chances are it will be even more focused on electronic payments, but which ones?  It’s hard to say, but what we can say is that PrintBoss makes your payments today easier and more secure.