Paying it Forward: A Look Ahead at Emerging Payment Trends that Will Impact Your Business

The financial crisis has raised new concerns related to re-paying debts and maintaining cash. With less than optimal access to credit, businesses are now more likely to seek smart investments and keep more cash on-hand. In addition, businesses are now challenged to tighten controls and uncover efficiencies in the payments process. To find these efficiencies, one area that has risen to the forefront is payments automation. By implementing payments automation tools, companies seek to improve control over the timing of payments and the selection of payment type used, as well as manage the information that is associated with their payments.

In a 2010 Federal Reserve Payments study, the number of cheques in use in the US declined by 7% from 2006 to 2009. In addition, according to a 2010 Association for Financial Professionals (AFP) Electronic Payments Survey, cheques now make up 57% of all business-to-business (B2B) payments, which is down from more than 80% in 2004. It is evident that a transition from paper to electronic is currently in progress, but why such a shift?

One reason could be fraud. In the 2010 AFP Fraud Survey, 71% of responders reported that their company was the target of attempted or actual payments-related fraud, with 93% of these targets focused on cheque payments. This signifies that cheques continue to be a target for fraud, and with other, more efficient options available, businesses are increasingly looking to electronic payments (e-payments) to guard against cheque fraud.

This shift and focus on e-payments and efficiencies paves the way for the development of new tools and services in the payments landscape.

A Shift has Begun: Outsourcing

Today, as much as ever, businesses are looking to do more with less. This means exploring and realising the benefits of leveraging technology to improve control and access to information, while also looking for a means to either manage or cut costs.

Some businesses have outsourced elements of, or even their entire payments function, allowing their banks to help automate the payables process by offering tools to help format, manage, and initiate automated clearing house (ACH) payments, wire transfers, paper cheque payments and card payments. Businesses are then better able to:

  • Leverage the capabilities of an enterprise resource planning (ERP) platform.
  • Reduce processing costs.
  • Improve reconciliation.
  • Centralise control over payables.
  • Enhance accuracy and timeliness of payables.

Yet, outsourcing is only one of the emerging payment trends that can impact your business.


A purchasing card (p-card) is a commercial card solution designed to allow organisations to make electronic payments (e-payments) for business expenses. One of the many reasons businesses move small to medium- sized B2B transactions to card transactions is because of the cost savings. In fact, according to the National Association for the Commercial Card and Payments Industry (NACCPI), when a payment method is switched from the traditional process to a p-card, efficiency savings range from 55% to 80% of the traditional process cost (for paper payments). While originally designed for transactions involving the use of plastic cards for transactions, virtual card transactions, particularly for accounts payable (A/P) transactions, are becoming increasingly important as a component of commercial card programmes, which are already an important component of an overall payments strategy for businesses.

Integration of Payments with Information and Access

The idea of better integrating payment tools with the information that is associated with the payment is something that is long overdue. Today, this mainly paper process is cumbersome for most. Emerging solutions in the market are making inroads towards achieving the following: simplified payment initiation through electronic invoicing (e-invoicing), re-association of remittance and payment after settlement, and the ability to select payment options and timing based on clearing times, costs, and other parameters.

Being able to track the invoicing and payments process online and having quicker access to information for the funding, purchasing and settlement of goods and services allows clients to more accurately manage their payments process, improve their working capital, and unlock improved payment terms and related discounts with suppliers that may not have been manageable within a paper-based process.

Paving the Way for the Financial Supply Chain

Emerging trends in the payments landscape, and an increased focus on integrating payment information, along with the payments themselves, are also paving the way for longer-term financial supply chain solutions.

Looking ahead, the automated/consolidated payables concept, including comprehensive solutions, which offer ACH, wire, cheque and card payments, will become standard offerings for businesses. Expanding this concept further, solutions may include a streamlined invoicing process with integrated payment details and remittance information. Ultimately, a complete procure-to-pay (P2P) solution serves to improve working capital efficiency, and may even include financing options for both buyers and suppliers in the form of factoring, reverse factoring, or other options.

As businesses continue to seek efficiencies, they need to look at emerging payment trends. These trends will not only allow you to streamline processes, but they also have the potential to positively impact your business’ bottom line.


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