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Business- to-Business (B2B) payments are transitioning from traditional methods such as checks, wire transfers, and cash to modern payment systems that use the internet. However, an analysis from MoneyTransfers.com shows that 33% of B2B transactions in the US and Canada are still made through Checks despite technological advancements.
Speaking on the findings, the CEO of MoneyTransfers, Jonathan Merry, said :
Old habits die hard, and people who started with checks find it hard to switch to other payment systems. With more businesses needing to pay suppliers and employees quickly and securely, there’s a need for more efficient payment solutions that can streamline the process.
MoneyTransfers CEO, Jonathan Merry
Checks were once the standard for B2B payments; however, many issues are associated with checks, such as manual errors in filling out details or lost documents. In addition, check payments take longer to process than electronic payments.
Why Do Firms Prefer Making Payments via Checks?
There are several reasons why many businesses prefer making payments via checks. One of the significant benefits is that checks provide an auditable trail, meaning they can be tracked and traced back to the original payer in cases of dispute or fraud. Additionally, many organizations have existing systems and processes for managing check payments, making them a more secure and convenient option.
The use of checks can also be beneficial in terms of cost, as they are generally cheaper than electronic payment methods such as ACH or credit cards. This is because check payments may not incur fees on the payer or receiver, which allows businesses to save money on processing and handling costs.
Finally, checks provide a high level of security and privacy, as personal information is not exposed when payments are made.
However, despite the benefits of using checks, businesses should consider transitioning to digital payment methods as these can provide increased efficiency, convenience, and cost savings.
Digital Tools Are Propelling Cross-Border B2B Payments.
Business communication and sales methods have drastically changed in recent years due to the emergence of digital tools such as ecommerce platforms, online banking, and cloud payment processing solutions. This shift has enabled companies to make cross-border payments more quickly and securely than before.
Digital payments can help reduce costs associated with exchanging currency, international money transfers and bank fees and offer faster. People can access large volumes of data on social media to help set up businesses. Besides, online resources allow companies to maintain customer relationships.
Businesses that embrace digital media are likely to see a fivefold increase in income. As a result, companies can more easily engage in international trade, opening up new revenue growth opportunities.
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