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that require significant human interaction. With few
Insider’sreport staffers on site to originate and receive incoming mailed
checks, businesses were forced to consider new, digital,
on payments payment options.

A 2020 survey of North American small businesses,
conducted by Mastercard found 82 percent had changed
how their businesses send and receive payments. Sixty-
four percent of small businesses said they were trying to
Electronic payments steer trading partners toward digital payments.

displacing checks "The pandemic has made it painfully clear how labor-
intensive current business payment processes are,
especially for small and medium-sized businesses," said

By Patti Murphy Ron Shultz, Mastercard executive vice president.
ProScribes Inc. Real-time payments are one digital payment option ready-
made for B2B. But one fact I've learned in my years following
wenty-five years ago, I gave a speech likening the payments space, it's that moving to new networks and
checks to the Energizer Bunny, the Energizer processes takes time—a lot of time. We need look no further
battery mascot that keeps running and running than the ACH. It took more than 40 years for ACH payment
T even as competitors peter out. Now it seems like volumes to surpass check volumes.
the "Energizer check" is beginning to peter out.
As Jack Baldwin, chairman of BHMI explained to me
In 1997, Americans wrote about 4 billion checks per earlier this year, many financial institutions and back-end
quarter, or about 16 billion in all that year, according to processors are apt to struggle with the transition to real-
the Federal Reserve. In 2021, Americans wrote just over time payments. It will "cost a lot of money and take a lot of
3.7 billion, total. Not surprisingly, the drop in check usage time," he said.
accelerated during the height of the COVID-19 pandemic.
The automated clearing house (ACH) network picked up Building the B2B case for cards
some of the slack. Roger McNamara is a huge proponent of migrating B2B
check payments to cards. I've interviewed him several
According to Nacha, ACH payments grew by 8.7 percent times on the topic, including on the Merchant Sales Podcast,
in 2021 to 29.1 billion, led by a 20 percent jump in B2B and he has written extensively about the B2B opportunity
payments, which totaled 5.3 billion. B2B payments across in The Green Sheet.
the ACH network grew by more than 20 percent from 2020
to 2021, to total 5.3 billion. McNamara's experience includes a stint at American
Express, where he led a national team selling B2B. After
Inherent inefficiencies in the check payment system are that he founded a B2B sales training and consulting firm.
what led to creation of the ACH system 50 years ago, and Next, he joined Visa as director of B2B acceptance, which, I
it has made progress displacing checks. But it's been 50 believe, speaks to how the card brands view B2B payments.
years. Frankly, if the ACH hasn't yet displaced checks as a "B2B is the next great opportunity," he told attendees at the
preferred B2B payment method, I'm not convinced it ever Northeast Acquirers Association annual meeting earlier
will. this year.

In its Business Payments 2022 report, Mastercard estimated Recently, McNamara wrote a LinkedIn post suggesting
the North American market for B2B payments to be $25 rising inflation, coupled with average days sales
trillion, with more than half that money transacted by outstanding, strengthens the case for ISOs and their sales
check. Just 4 percent of the total (about $1 trillion) is reps to sell B2B card acceptance.
transacted using credit and debit cards.
At 45 days sales outstanding and inflation running over 9
In 2020, consumers and businesses, combined, spent $6.75 percent on an annualized basis, a supplier loses 1.12 percent
trillion using credit and debit cards bearing logos of the of the value of an invoice while waiting for payments
four major card brands: Visa, Mastercard, Discover and to come in, McNamara estimated. With interchange
American Express. optimization—where additional, Level 2 and Level 3 data
gets collected and processed with the transaction—card
Clearly, COVID had an impact on B2B spending. As the processing costs go way down. Some estimates place the
pandemic forced many businesses to accommodate virtual potential savings at 40 percent, or more.
workforces, it shone a light on legacy receivables processes

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