Cheaper, faster, more secure—what's not to like about electronic payments? While the advantages that e-payments provide over paper checks seem obvious and sizable, business-to-business (B2B) transactions are making the switch somewhat slowly. Meanwhile, though, financial institutions are making new efforts to simplify companies' adoption of electronic payment methods.
A survey released by the Association for Financial Professionals (AFP) late last year found companies were making 50% of B2B payments by check, down from 57% in a 2010 AFP survey. Other research suggests the use of checks is even more prevalent among smaller businesses. Moreover, the AFP data point to a deceleration in the move to electronic payments. The organization's previous electronic payments survey showed a 23% drop in the use of checks over three years, from 74% of B2B payments in 2007 down to 57% in 2010.
The persistence of checks stems from their ease of use and businesses' familiarity with them, observers say.
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