From cash to crypto, payment technologies have changed substantially over the years, shifting how businesses transact with suppliers and manage financial operations. Today, B2B payment trends are evolving to leverage technologies that make transactions faster and more secure.
In our B2B Payment Trends guide, we share insights from our recent surveys of finance leaders and extensive industry research. Read on for a summary of our findings and learn more about the latest advancements in digital payments and B2B adoption.
Goodbye, Paper Checks
In the last 20 years, paper checks have gone from one of the most popular payment methods to outdated. Data from the Association for Finance Professionals (AFP) shows that more than 80% of B2B payments in the U.S. and Canada were made by check in 2004. In 2023, that number dropped to 33%.
AvidXchange’s 2024 Trends Survey underscores this, finding that only 5% of organizations use checks most often to pay suppliers. It’s no surprise that businesses are moving away from paper checks given the pervasiveness of check fraud today.
Our B2B Payment Security report, produced with the Institute of Finance & Management (IOFM), found that 76% of organizations experienced payment fraud in the past year, with checks comprising the largest share of related financial damage. According to the same report, losses attributed to check fraud ranged from less than $50,000 to over $1 million.
Hello, Digital Payments
Security isn’t the only driver influencing the move away from paper checks. Speed is another factor that’s impacting this B2B payment trend. AFP’s Digital Payments Survey Report notes that speed is the primary consideration impacting businesses’ payment method choice.
According to the Consumer Financial Protection Bureau, banks typically take up to two business days to settle a check payment. And that doesn’t include the time businesses take to prep and mail that check to a supplier. Alternatively, digital payment methods like ACH are settled four times daily and real-time payments (RTPs) via FedNow are settled in seconds.
AFP found that 80% of finance professionals in the U.S. and Canada believe faster payments will have a “positive” or “very positive” impact on organizations. So, it’s no surprise that businesses are leaving checks behind for faster payment methods.
Real-Time Payments Expand
RTPs make payments about as fast as they can get, and adoption is increasing as the FedNow Service network grows. PYMNTS reports that real-time payment transaction volume is expected to hit $8.9 billion in 2026, quadrupling from 2022.
According to The Federal Reserve, at launch in July 2023, 35 financial institutions were participating in the FedNow Service Network. As of May 2024, that number had ballooned to 758. Our 2024 Trends Survey echoed this growth, with 81% of respondents saying they’ve noticed increased demand for real-time payments like FedNow from suppliers.
Our 2024 Trends Survey also found that 49% of organizations used RTPs to pay suppliers in 2023, with 21% using this method most often. Adoption will likely grow as the FedNow Service network becomes more widespread and suppliers request this B2B payment trend more often.
AI Impacts Electronic Payments
AI can transform digital payments by incorporating advanced features such as enhanced fraud detection and predictive analytics. These innovations are designed to add security and improve operational efficiency compared to paper-based payment methods.
AI-driven capabilities help protect businesses from unauthorized transactions, optimize cash flow management, minimize manual errors, and boost productivity. By integrating AI into digital payments, the transaction process can become more streamlined.
Though our B2B Payment Security Survey with IOFM indicated that only 5% of AP departments currently utilize AI-driven anomaly detection for mitigating payment fraud risks, the adoption rate will likely increase as overall AI adoption rates grow.
Benefits of Following B2B Payment Trends
Following B2B payment trends away from paper checks and towards electronic payments offers potential organizational advantages, including:
Cost Savings
Electronic payments help lower labor costs by mitigating time-consuming tasks like making check runs and filing paper receipts. Since electronic payments are processed faster than traditional checks, they can also help businesses avoid costly late fees and take advantage of early payment discounts and rebate opportunities.
Efficiency
Electronic payments expedite transactions and help organizations reduce time spent on manual processing.
Most accounting and AP software platforms directly receive statements from electronic payment platforms, facilitating automation of the reconciliation and reporting processes. By reducing paperwork and manual intervention, finance teams can enhance productivity and focus on strategic work instead of time-consuming tasks.
Control
Transforming AP processes and payments into digital formats helps provide AP teams with real-time transaction visibility, allowing for proactive oversight and management.
Automated workflows are designed to expedite invoice and payment processing, helping reduce delays and enhance cash flow efficiency. Customizable approval hierarchies and audit trails help AP teams retain control over their processes. And cloud-based, centralized systems can offer access anytime, anywhere, from any device.
Security
Electronic payment methods can provide businesses with substantial security benefits by helping reduce the risk of fraud. Unlike paper payments, digital transactions come with advanced encryption and security measures.
B2B Payment Trends: Final Thoughts
Many businesses are moving away from paper checks towards digital payment methods like RTPs and virtual credit cards. These modern payment platforms can offer businesses advantages like enhanced security, more efficient processing, and cost savings.
Today’s B2B payment trends help deliver convenience and agility to AP teams. Especially when integrating with existing AP and accounting software, digital payments are designed to enrich financial management and reporting within an organization, empowering businesses with the tools they need to maintain a competitive edge.