By Scott Goldthwaite, Vice Chair of the ETA Technology Committee
For consumers in the United States, paying merchants – whether by swiping or dipping a card, or tapping a mobile or smart device – is easier than ever. Electronic payments are obviously the default option for ecommerce, and debit cards are the most frequently used non-cash payment instrument at the point of sale. But business-to-business, or B2B, payments have not yet caught up.
Business checks might not be handwritten anymore, but they continue to use up reams of paper, even as the rest of the business world transitions to digital tools. In fact, most businesses still use checks. A 2016 survey by the Association for Financial Professionals (AFP) found that the average U.S. business pays about 51% of its bills by check. This reflects a 4% decrease year over year since 2004, when AFP began reporting on this metric. This varies by company size; middle-market corporations pay about 67.3% (two thirds) of their expenses with checks, while larger corporations make about 49% of their transactions by check. Additionally, while the percent of payments paid via check is declining, the overall volume of business checks is still increasing. Businesses in the United States wrote 4.1 billion checks in 2015, up nearly 20% from 3.5 billion checks in 2012, according to data from the Federal Reserve. Paying by check is still firmly entrenched in U.S. business practice.