In order to stay ahead of the curve, it’s important to recognize and address multiple issues in terms of operation and delivery service of payments. Conventional business payment structures continue to face vexing challenges in terms of increasing high-levels of usability, flexibility, and responsiveness in transactions. Here are some of the challenges faced by businesses –

3.1 Payment Processing Challenges

• High Processing Costs: Traditional paper-checks come with an overhead cost that may prove to be harmful in the long run. As per reports by the Bank of America, there’s an estimated cost of USD 4 to 20 per payment for checks. This can accumulate annually to severely harm a company’s revenue.
• Delay in Payments Affecting Cash Flow: The lag time between when a paper-check is written to when it’s reflected in the bank is always a concern. With longer payment cycle and delayed, manual payment processing, there’s an increase in Days Sales Outstanding (DSO) which negatively affects the overall cash flow. When customers don’t pay on time, the cash outflow would outweigh the total cash inflow causing an imbalance.
• Decoupled payments: Matching individual payments to a particular invoice often requires manual intervention. The process gets even more complicated because remittance information has to be gathered from different sources such as web-portals and emails. Furthermore, the information recorded might not be recorded correctly which makes it a very error-prone process that could create a bottleneck in completing a payment cycle.

3.2 Fraud Risk

With poor authorization controls for B2B transactions, the risk of fraud is very high. Some of the top risk segments include check forgery and cyber fraud. As per reports by the American Bankers Association, 60 % of attempted fraud is check related fraud. Businesses following a paper-based manual process are much more likely to be exposed to these risks involved in B2B payments.

According to reports by Deloitte, around 22 % of mid-sized businesses have dealt with payment frauds

3.3 Poor Visibility

With disparate payment methods and processing challenges, there is a lack of visibility into additional costs, error-prone delays, and chargebacks in individual accounts. Furthermore, companies are not able to take care of payment disputes as it is impossible to get a clear picture of finances.