Digital Payments Fall Short Without Universal Acceptance
- The "humble paper check" remains a formidable tool
- "Soft costs" need to be considered
- AI tech makes processing checks remarkably efficient
Outdated payment systems are catching up to businesses, but there’s one method that just won’t quit: the humble paper check. In their insightful discussion on PYMNTS TV, industry leaders reveal why, even as digital payment solutions revolutionize consumer commerce, checks remain a lifeline in the B2B space.
It seems counterintuitive in today’s fast-paced world, but nearly 40% of B2B transactions in the U.S. still move via paper checks. Why haven’t automations and slick payment portals fully taken over? The answer is simple—universal acceptance. No matter the industry, size, or accounting software, you can always send or receive a check. There’s no squabbling over compatibility or integration: the process just works, even if it takes longer.
Hidden Costs and Inefficiencies
As Murray Sharp of Nuvei shares on PYMNTS TV, the hidden costs of outdated payment processes aren’t found in transaction fees, but in manual labor, reconciliation headaches, and lost hours hunting down payment statuses.
“There’s a difference in the hard cost associated with money movement and the soft costs associated with the tasks and the workflow that happen in and around the payment,” he added.
Those soft costs are where the real pain lives. Despite digital innovation, nearly 40% of B2B payments in the United States are still made by paper check. But it’s not just about resistance to change. The simplicity and universal acceptance of paper can still beat the disjointed user experience of many digital systems.
In B2B — where a transaction involves two businesses with distinct processes and platforms — that simplicity matters and is what has kept old systems alive.
The inefficiencies stack up—yet the check continues to reign for one key reason: Trust. Both sides know what to expect -- with no training needed and no wading through portals that may not speak to each other.
Durable Checks
The industry is changing, of course. Companies are weighing the “frictionless” promise of embedded digital payments and integrated workflows—especially as they chase tighter margins. But until every player is on the same digital page, checks will remain the one-size-fits-all payment.
This will ultimately trickle down to the financial institutions. However, processing checks are now less burdensome with the deployment of AI technologies. Prior to this, financial institutions were seeing read rates and accuracy around 80-85%, requiring manual intervention to key in the remaining items. Large financial institutions, smaller community banks, and credit unions were forced to employ individuals within their deposit operations to focus on this manual task.
This is no longer the case, as more and more banks are utilizing solutions like Anywhere Recognition and Anywhere Payee to extract data from the fields of checks, achieving over 99% read rates and 99.5% accuracy rates.
So, do you think the majority of businesses will adopt a single digital payment channel? Let us know in the comments.