B2B Payments

Digitizing B2B Payments The Hybrid Way


For all of the happy life moments in which they appear, paper checks are unloved. So are paper invoices that precede them. The seeming incompatibility of paper and digital payments is somewhat of an illusion, however. In point of fact, most businesses of any size have a hybrid treasury-accounting back office where digital tools and paper instruments coexist.

In the inaugural Digitizing B2B Payments Tracker®, a PYMNTS and Deluxe collaboration, the balance between paper and pixels is explored, revealing some unique and surprising strengths of hybrid accounts receivable (AR) operations. With up to 80 percent of B2B payments still made by paper check by some estimates, and with reopening and recovery planning foremost in people’s minds, it’s a good time for digital streamlining to paper-centric payments.

Bridging the Paper-Digital Divide

“Many businesses still generate paper checks from the setup of their accounting systems,” Michael Reed, general manager of payments at Deluxe, told PYMNTS. “The best way today’s businesses can digitize their payment processes is by transitioning to innovative platforms that work with existing systems and do not require large infrastructure investments or changes to current processes.”

For example, Reed explained that Deluxe’s solution “… works like a check for the sender but [is delivered] through email, rather than U.S. postal mail, using APIs that work with existing software. The platform allows businesses to [adopt] digital processes without significant capital or IT investments at a time when business continuity is critical,” he said.

“Businesses can include detailed remittance information for transactions like accounts payable payments, [explanations of payment] for medical payments, pay stubs for payroll payments [and] even claim information for insurance payments.”

Bridging the paper-digital divide is an imperative in the coronavirus pandemic aftermath, as businesses will be watching every cent in an economic climate that is sure to be unforgiving. For some small and medium-sized businesses (SMBs), upgrades will have to be done in bite-sized stages, for reasons both financial and technical.

“Many businesses cannot jump from established AR and AP systems to digital solutions, while other may not wish to make such shifts,” the report states. “Budgetary concerns, infrastructure issues and security worries prompt them to slowly and carefully approach such innovations,” adding that, “… businesses are responding to requests for faster transactions, experimenting with eInvoicing and online check-scanning technologies and finding ways to keep paper checks involved in B2B payments.”

Paper Wait

There is no debating the speed and accuracy of digital accounts payable (AP) and AR tools versus paper and the postal service. While digital upgrades were being pursued at a more leisurely pace before the pandemic, harsh financial reality is forcing the hand of firms still tied to paper payments.

Be that as it may, thousands of companies have reasons for retaining component of their paper-based accounting system. For those operators, the hybrid approach holds appeal.

Many companies are now looking to pair paper checks’ benefits with those of digital AR and AP documentation solutions, which can help them avoid the costs and potential fraud that come with creating entirely new payment infrastructures,” the report states.

“These shifts require firms to examine technologies like check scanners, online check conversion tools or switching to eInvoicing solutions or online AP products, which represent a $950 billion B2B opportunity, according to a 2018 study. Companies of all sizes are searching for technologies that can help them more quickly send out the necessary data and documents attached to those payments.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.