The ability to use electronic payments (e-payments) will play a critical role in the future success of Canadian companies, but a survey found there are barriers slowing adoption of the technology. The study, ‘Electronic payments in Canada: What’s the hold up?’, conducted by the Canadian Financial Executives Research Foundation (CFERF), found that while there are significant issues making widespread adoption of e-payments in Canada a challenge for businesses, top executives indicated a high level of preference for increased e-payments and identified substantial growth opportunities in the payments sector.
The study found that Canadian financial executives are aware of the benefits of e-payments and are actively using such methods to cut costs and speed payments. They are also looking for ways to improve on current e-payments systems through standardisation and integration.
“We’ve learned that Canadian financial executives are eager to adopt a wide range of e-payments options because it benefits their business, as the recent postal strike demonstrated,” said Michael Conway, chief executive office (CEO) and national president, Financial Executives International (FEI) Canada. “But concerns over costs, processes, behaviours and security still need to be dealt with to make e-payments compelling for both buyers and suppliers.”
CFERF surveyed 190 senior financial executives across Canada who are responsible for making decisions regarding e-payments within their organisations. The data from the nationwide survey was combined with insights gathered from an executive research forum held simultaneously via videoconference in Toronto and Vancouver.
The findings of the study highlight what financial executives want to see to increase the usage of e-payments in the future.
“The move towards electronic payments is a logical evolution for business. We handle payments processing for companies and financial institutions across the country and we find that one of the key challenges is often internal hurdles to change. Ease of use and managing the transition to a new system is always critical for any client,” said Oscar van der Meer, chief technology officer (CTO) at Central 1.
The interest in electronic fund transfers is undeniable with vast a majority of respondents (86%), saying they would prefer using electronic transactions over the traditional paper cheques (only 2% prefer paper transactions). The study points out many benefits, including convenience, improved cash flow and reduced transactional costs.
Despite those potential benefits, only 27% of executives reported that more than half of their companies’ transactions are electronic. The barriers towards full-scale adoption of electronic payments identified by respondents are:
- Modifying customer behaviour (39%).
- Security concerns (35%).
- Difficulties in motivating suppliers to accept electronic payments (34%).
- Organisational constraints and priorities (31%).
- Lack of integration between e-payments and current accounting systems (29%).
Addressing these concerns are key to achieving wider adoption of e-payments in Canada. Moving forward, automating the reconciliation process for payments was identified as one of the major improvements executives plan to make over the coming year to advance the adoption of electronic payments.
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