While a recent Payments Canada report highlighted that cheques remain an important payment option for large value corporate payments in the north of North America, south of the border in the US businesses finally appear ready to shed cheques and embrace digital payments for business-to-business (B2B) transactions, according to the AFP 2020 Survey, sponsored by Truist.

Conducted virtually at AFP 2020, the survey aimed to determine the likelihood of organisations to move away from cheques to electronic payment methods and the benefits of doing so. Additionally, respondents were asked about payments fraud trends since the start of the COVID-19 pandemic. The survey received 156 responses from corporate practitioners.

Digital payments inroads

Almost 60% of surveyed said that their organisation is either very likely or somewhat likely to convert the majority of its B2B payments to suppliers from cheques to electronic payments. One-third of organisations are currently primarily using electronic payments for their B2B transactions. Just 5% of organisations said that have no plans to convert from cheques to electronic payments, while the same figure reported that they are unsure.

In terms of the benefits of electronic payments, straight-through processing to AP or AR and general ledger was identified as the main advantage, cited by 49% of respondents. Some 45% of practitioners reported that their organisations benefited from cost savings when sending payments electronically. Improved cash forecasting and speed of settlement was considered a key benefit by 42% of respondents. 

When it comes to receiving payments, half of survey respondents identified the speed of settlement as a key benefit. Other benefits of receiving payments from customers via electronic methods include:

• Straight-through processing to AP or AR, and general ledger (31%).
• Improved cash forecasting (30%).
• Improved matching for cash application (27%).
• Improved supplier/customer relations (26%).

The survey also highlighted the main barriers to adoption of electronic payments, of which there were quite a few that were widespread:

• Lack of customer or vendor adoption (79%).
• Cost of making changes to existing internal processes (74%).
• Absence of a standard format for remittance information (74%).
• Lack of integration between electronic payment and accounting systems (71%).

Tackling payments fraud

Two-fifths (40%) of all corporates surveyed experienced a higher number of fraud attempts since March 2020 compared to the same time-frame as last year. A further 40% reported that the number of fraud attempts at their companies was unchanged compared to last year. Only 3% saw fewer payment fraud attempts in that time. 

Meanwhile, 42% of respondents reported that an outside individual (through methods such as a forged cheque or stolen card, for example) was responsible for the attempted/actual payments fraud attempts at their organisations since March 2020. Some 16% believe a third-party or outsourcer (such as a vendor, professional services provider, or business trading partner) targeted their companies. A similar number (15%) saw attempted/actual payments fraud due to an account takeover (from a hacked system or malicious code for example). Only 7% of firms identified crime rings as the cause of fraud attempts.