#KillTheCheque: Moving B2B Payments From Cheques To Digital Pt. 2
Cheque creation and issuance can delay the movement of capital, costing businesses time, money, and efficiencies. Cheques can hurt your business cash-flow, as it’s never clear when a cheque that you sent out by mail will arrive, when someone will cash it, or when it will clear in the bank. This can cause serious cash-flow problems, especially for small businesses. With prepaid, you know when the money has been sent out, and when it has been received.
Reports show that cheques can account for 25 percent of outgoing payments from small businesses, sole proprietorships, partnerships, and charities. Research from MasterCard Inc. and Kaiser Associates Inc. from 2013 indicates that migrating to electronic payment options could save Canadian businesses about 41 per cent in business-to-business transactions.
Although cheques continues to play a large role in the corporate world and B2B payments (64 percent of B2B payments are still made with cheques, despite the fact that 67 percent of consumer payments are made electronically), businesses are beginning to recognize the value in faster payment technologies such digital payments and are now converting from checks to card-based payments.
Faster payments allow businesses to have more flexibility to make last-minute and emergency payments, quick changes to payroll, or early payments. Prepaid payment cards streamline purchases, improve accounting processes, and offer greater transparency to a company’s cash flow.
Prepaid cards offer a less expensive and more secure option for issuing B2B payments.
- Funds can be electronically transferred and distributed within seconds to the intended recipients without the hassle and delay of mailing cheques.
- They can replace a direct deposit or wire transfer, giving the end user quicker access and more flexibility to use the funds.
- The funds are immediately available to the consumer to make purchases or withdraw cash at an ATM.
- Businesses can use the card to pay wages and commissions, reimburse expenses immediately, pay contractors and more, using a single tool, in a faster, more cost-effective and controlled manner.
- Open-loop prepaid cards can also replace traditional company credit cards, direct deposit transactions and petty cash in a form that is easier for the end user to use at the point of sale.
- A card offers an easier transition to electronic payments than an automated clearing house (ACH) deposit.
t’s time to move to digital payments. By modernizing business payments, companies reap the benefits of reduced costs and more. Inside our new ebook, “Transitioning to Electronic Payments for Canadian Businesses,” we #KillTheCheque and show you the benefits of switching from cheques to electronic payments, as well as the Top 5 Benefits of Outsourcing Your B2B Payments.
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