Disbursements And The COVID-19 Moment

If you thought checks were merely being tolerated before, COVID-19 alarm has rendered all paper instruments persona non grata, including cash. Are we witnessing the death of paper payments? It clearly doesn’t look good for printing or mailing and, as a disbursements story, behavioral shifts imposed by a deadly virus just sped up contactless adoption by years.

Additionally, billions in government aid are being paid out based on a history of Internal Revenue Service (IRS) e-filing, which has left millions who do not e-file wondering how (and even if) their money will ever arrive, and in what form. With the Federal Reserve’s FedNow instant payment service still two to three years away, it’s another manifest disbursements issue arising from COVID-19 disarray. Financial institutions (FIs) and Fintechs think they can help solve it.

“Ample businesses are currently confronting … outdated processes as the spread of COVID-19 shunted most employees into remote work from their homes, making managing paper bills, checks and invoices challenging. Digital or mobile disbursement methods would make this part of the payment cycle much shorter and easier,” according to the April 2020 PYMNTS Disbursements Tracker®, powered by Ingo Money.

Rescuing SMBs

Of all the imminent matters facing individuals and businesses at present, the most pressing strategic imperative is saving the nation’s 29 million small and medium-sized businesses (SMBs), staving off a more protracted economic event. One very promising channel is mobile.

“There has been … growth in mobile disbursement interest in the B2B space … especially as more millennial and Gen Z workers join firms’ staff,” the report notes. “These younger employees expect faster payment experiences, but mobile-enabled B2B disbursements have proven to be relatively complex.”

As the coronavirus pandemic forces social distancing, obsessive hand sanitizing and a generalized fear of touching things, digital disbursements are obviously safer, and of course far faster.

“Digital or mobile disbursement methods would make this part of the payment cycle much shorter and easier, preventing them from having to track down payments,” the report states.

“It is worth noting that businesses integrate proper authentication processes into their disbursement processes, however. Mobile disbursements are becoming critical for both B2B and B2C companies. The entities that can adapt alongside rising global smartphone penetration levels — and those that leave outdated check disbursements behind — are the ones who will dominate in both fields.”

Pandemic Goes Paperless

“The financial challenges stemming from COVID-19 put into perspective the need for a better, modern disbursement solution — one that is ubiquitous, digital, 24/7 [year-round], on-demand and with an ability to provide people with choice in how they receive their funds with many instant payment options,” Ingo Money CEO Drew Edwards told PYMNTS.

With more than 40 percent of B2B payments made by paper check in first half 2019, it’s hard to imagine the jarring disappearance of familiar payments forms. But the time has come at last.

“Banks and businesses see the writing on the wall,” Edwards added. “What is likely to change after the pandemic is faster adoption of instant digital disbursement solutions that better prepare them to facilitate disbursements in real time [and] on demand, especially in times of great need.”



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.