Results of a new survey from the Association of Financial Professionals (AFP), released in conjunction of the annual AFP conference in Boston this week, reveal that business are gradually adopting electronic payments. The study is a follow up to a similar survey conducted in 2004.
Summary of key findings:
- The number of check payments has decreased. The typical organization makes 74 percent of its B2B payments via check (the rest via ACH, cards, or wire), down from 81% in 2004.
- Larger corporates moving more quickly. Not surprisingly, larger organizations with higher volume are making more electronic payments.
- Major suppliers targeted. 43 percent of respondents are likely to convert the majority of their B2B payments to major suppliers to electronic rather than check payment in the next three years (up from 28% in 2004). 33 percent of respondents are likely to convert the majority of their B2B payments to minor suppliers.
- Top 3 benefits of electronic payment identified by the respondents: 1) cost savings, 2) improved cash forecasting, and 3) straight-through processing.
- Top 3 barriers to electronic payment identified by the respondents: 1) information technology and integration constraints, 2) inability of trading partners to send or receive automated remittance information, and 3) difficulty in convincing customers and suppliers to adopt electronic payments.
- Progress toward integration. 59 percent of organizations have integrated their accounting systems with their ACH payment systems and 40% have done the same for card payments.
- Purchase cards and wires growing. Three out of five organizations reported an increase in purchase card usage over the last two years, especially for small dollar purchases. 43 percent of wire transfer users increased their wire volume during the same time frame.
More B2B payment news here.