In 2010, you couldn’t throw a rock in the world of accounts payable without hitting someone who was eager to tell you check payments were going away. By 2020, the predictions went, checks would be a tiny part of the B2B payments mix for most organizations.
We all know that didn’t really happen. Back in 2010, companies were trumpeting the potential for 400% improvement in invoice cycle times and payment costs by dumping paper invoices and checks, which spurred a lot of predictions about the next decade would go.
Here’s how it went: In 2014, AFP estimated 43% of all B2B payments were being made by check. In 2020, Ardent Partners estimated that…43% of all B2B payments were being made by check.
So that one didn’t work out. That big acceleration, that major move to automation and digitization, didn’t arrive on the timeline it was supposed to. We’ve seen firsthand as a provider of solutions digitizing and automating invoice and payment processes that AP teams can be reluctant to move away from what they’ve known for a long time, even if the benefits of doing so are clear and real. As I’m sitting here in 2021, though, those predictions are coming true.
COVID-19 shook things up for every business, but accounts payable and accounts receivable departments had their world turned upside down. If your team was sitting at their desks stuffing checks into envelopes to make payments to vendors pre-pandemic, your business suddenly had to wrestle with how to get those payments out the door from home offices with remote approval chains. The transformation of the consumer world, from payments to delivery of goods to digital streaming for media, has been called the Great Acceleration, and that has rapidly changed the way consumers pay and get paid. The urgency hasn’t been there for businesses, but as the world buckled under the pandemic, the B2C and C2C examples suddenly started looking great.
That urgency has been driven by tough situations. We’ve talked to businesses recently who have staff still printing checks from home and running back and forth from the office to pick up critical documents, which is exactly as efficient and secure as it sounds. Necessary equipment like check printers and necessary procedures like double signings for checks just aren’t conducive to home working environments, even if you’re not actually taking them home.
While you probably have less-terrifying stories from your own business, chances are you’ve settled into the new normal by streamlining and digitizing processes you might not have really focused on in decades. If you haven’t, you’ve likely realized you’re behind the times. More than anything else–all the technology advances, all the potential benefits, all the articles and reports–the need to adapt to working and living remotely has started to push change.
Money movers reported huge hikes in digital transactions in 2020 that are carrying over to 2021, there are creative criminals out there taking advantage of gaps in traditional approval and communication processes, and you don’t have to read the news very regularly to know that the mail’s slowed down. COVID-19 is the inflection point for these long-term trends, and the new normal will be an extension of the one-click, automated, digitized, fast-paced world you already embrace as a consumer.
We’re picking up speed on this important journey, and that means we’ll have a lot to talk about in the coming months and years. Better late than never.
For further insight into the payments and banking industries, subscribe now and stay up-to-date on the latest tips, trends, and topics. You can also check out The Payments Podcast, where experts engage each other on the real world factors impacting the payments and banking industries.