The Future of B2B Payments: Beyond Checks and ACH
HighRadius
Autonomous Finance for Order to Cash, Treasury, Record to Report, B2B Payments & Accounts Payable
FedNow, launched by the Federal Reserve in July 2023, created significant buzz in the payments space in 2023. This instant payment platform is touted to revolutionize how payments are sent and received.
However, the question remains: will B2B businesses, which heavily rely on checks and ACH, embrace this revolution?
FedNow vs ACH vs Wire Transfer vs RTP ??
The most common payment options used by US businesses to clear their payables are checks, ACH, credit cards, and wire transfers.?
Can FedNow grab some of the pie from checks, ACH, and other payment forms? We strongly believe it can!
Instant Payments to Divert $37 trillion??
Deloitte predicts instant payments will divert up to?$37 trillion?away from checks and ACH in the US by 2028.
In the last 15 years (2004 - 2019), the use of checks in B2B payments dropped by?50%. Most transactions moved to the ACH platform.
A similar transition is likely to happen in this decade, with a substantial proportion of the current ACH, credit card, and wire transfer payments moving to FedNow and other instant payment platforms.
The key drivers of a transition to instant B2B payments include:
领英推荐
Read the full analysis here: Link
Challenges in Using FedNow for B2B Payments ??
While FedNow promises to be a game-changer with its speed, security, and performance, some challenges that can hinder its adoption:
FedNow Kickstarts a New Revolution ??
While FedNow may not be an overnight hit with CFOs and finance managers, it will gradually see higher adoption and eat into the share of checks and ACH in the next 2 - 5 years because of its speed of processing, lower costs, innovativeness, and reliability.
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