Faster payments are speeding your way

Organizations, just like consumers, are racing to a future where payments are ever more convenient and faster. Whether it’s business-to-business (B2B) payments, business-to-consumer (B2C) or consumer-to-business (C2B) payments, the volume and speed is only growing. See how in this infographic.

 

A decade ago, faster payments seemed like a good idea that wasn’t ready for widespread use. But today, faster payments aren’t just an idea — they’re here.

 

The decline of checks…

Not only are checks declining for B2B payments, but also for B2C and C2B payments.

 

Number of payments

B2C payments in 2012: 3.6 billion

B2C payments in 2015: 3.4 billion

 

B2B payments in 2012: 6.4 billion

B2B payments in 2015: 5.3 billion

 

C2B payments in 2012: 10.1 billion

C2B payments in 2015:   8.8 billion

 

Amount of payments

B2C payments in 2012: $3.79 trillion

B2C payments in 2015: $3.64 trillion

 

B2B payments in 2012: $17.92 trillion

B2B payments in 2015: $18.40 trillion

 

C2B payments in 2012: $1.61 trillion

C2B payments in 2015: $4.27 trillion

 

Source: Federal Reserve Board

 

 

…and the rise of electronic payments

As the use of checks declines across all types of payments, cards and ACH activity have risen.

 

 

Number of payments

Debit card payments in 2012: 56.5 billion

Debit card payments in 2015: 69.5 billion

 

Credit card payments in 2012: 26.8 billion

Credit card payments in 2015: 33.8 billion

 

ACH payments in 2012: 20.4 billion

ACH payments in 2015: 23.5 billion

 

Amount of payments

Debit card payments in 2012: $2.1 trillion

Debit card payments in 2015: $2.56 trillion

 

Credit card payments in 2012: $2.55 trillion

Credit card payments in 2015: $3.16 trillion

 

ACH payments in 2012: $129.4 trillion

ACH payments in 2015: $145.3 trillion

  

Source: Federal Reserve Board

 

 

Big and bigger

The amount of commercial payments is big and getting bigger. The potential for faster payment technology is enormous.

 

Example: the growing U.S. B2B payments market

2014: $16.5 trillion

2016: $18.5 trillion

2020: $23.1 trillion

 

Sources: Deloitte, Business Insider

 

 

Checking out?

Paper check payments have declined significantly in the past 12 years. Despite a leveling out in 2016, it doesn’t appear that check payments will regain a dominant position.

 

Example: percentage of B2B check payments by year

 

2004: 81%

2007: 74%

2010: 67%

2013: 50%

2016: 51%

 

Source: 2016 AFP Electronic Payments Survey

 

Electronic in?

Although nearly all organizations still pay major suppliers by check, electronic payment tech has become more prominent.

 

Example: B2B disbursements to major suppliers

Percent of companies using each type of payment

Check: 94%

ACH credits: 83%

Wire transfer: 79%

Purchasing cards: 48%

ACH debits: 24%

Single-use accounts: 8%

 

Source: 2016 AFP Electronic Payments Survey

 

 

Faster payments ascendant

The 412 corporate payments practitioners who responded to the 2016 AFP Electronic Payments Survey were clearly in favor of moving to electronic payments.

 

What’s the likelihood of the majority of your payments to major suppliers moving from checks to electronic within three years?

Very likely: 44%

Somewhat likely: 26%

Not at all likely: 8%

Majority is already electronic: 21%

 

Likely uses of same-day ACH payments

Last-minute bill payment: 57%

For emergency payroll: 38%

A/P payments made on the last day of discount availability: 24%

Most payments, for the sake of speed: 19%

Trading partner payments: 17%

Other: 10%

 

Source: 2016 AFP Electronic Payments Survey

 

 

E-pay is here to stay

As the use of electronic payments increases, treasury managers and other finance professionals are exploring the possibilities of faster payments.

 

Faster payments may offer a way for organizations to cut costs, improve forecasting, reduce attempted fraud and improve working capital positions.