According to a recent survey by MineralTree, three out of four businesses with less than $10 million in revenue still make the majority of their payments with paper checks. Yet many of those same companies say they would be interested in an online payment system that provides an alternative to writing checks.
As this information makes clear, a gap exists between how payments are currently made and the way in which many businesses would like to make them. Although there are a number of explanations for this conflict, they can largely be summarized in one word: options.
While businesses trust paper checks and the features they provide, the convenience offered by an electronic payment system is also attractive. The problem is that there are very few products that combine the two.
Current Online Payment Systems Lack Options for Small Business
Consider: Businesses of all sizes issue nearly 10 billion checks annually – spending $10 billion to $20 billion each year to do so – but those with less revenue haven’t had many alternatives to paper payments. Many of the current electronic bill pay tools don’t offer extended remittance capability, integration with same day loans accounting systems or the kind of security and fraud protection that businesses are comfortable with.
Without these features, the incentive to make the switch from paper checks dwindles. Then factor in the increased workload that comes with repeated data entry and combine that with the decreased internal management controls, and the incentive to switch all but disappears.
That said, there are new solutions being developed. PopMoney and Square.com have both launched electronic payment services. These are focused more toward person-to-person or bank-centric payments, however, and suffer from many of the same shortcomings mentioned above when it comes to business applications.
They may be useful for some microbusinesses that behave in much the same way as consumers, but they do not meet the business needs of most companies.
The Introduction of Deluxe eChecks powered by VerifyValidTM
Deluxe has introduced a new tool that simply and effectively bridges the gap between paper checks and electronic payments: Deluxe eChecks. This solution might not seem as exciting as some of the other products on the market, but it combines the paper check’s most powerful features with an impressive, pay-anyone online payment solution.
The eCheck is an important step forward for businesses because it allows them to incorporate electronic payments into the payments process they currently use, requiring no new software purchases or extra time for training. An eCheck works with an existing accounting system and checking account. It leaves an electronic trail for each transaction and uses a patented technology that allows users to easily validate each check. Remittance data and other essential information can also be included.
Checks are still the primary payment type for most transactions made by small businesses. While many of those companies are interested in an electronic alternative, research has shown that owners are comfortable with the current paper check processes they use and would prefer a gradual introduction to electronic alternatives.
The eCheck provides this introduction. It combines the tried-and-true features of paper checks with the new capabilities made possible by electronic payment, and it builds just the kind of bridge many businesses are looking to cross.
Article originally posted by Rhende Wilton.