Why Electronic Payments are Gaining Traction in Accounts Payable

While checks remain the payment method of choice for middle-market companies, electronic payments are picking up steam.

This article is based on findings from the 2019 State of Accounts Payable.

Electronic payments are on the rise, according to a report on the state of accounts payable surveying 1,451 participants spanning all seniority levels. This same report found that while paper checks continue to dominate B2B payments, the percentage of businesses paying with ACH transfers and credit cards increased by 17% and 26%, respectively.

This percentage can be explained by a few key advantages that electronic payments have over their paper counterparts that continue to dominate the B2B payment space. By shifting to electronic payments, businesses will experience improved security, greater simplicity, and cost savings.

Improved Security

Electronic Payments are encrypted to protect critical data. For virtual card payments, a process called tokenization adds an extra level of security to ensure that sensitive credit card information is protected. During payment tokenization, an individual’s primary account number (PAN) is replaced with a randomly-generated 16-digit number called a token. Each token can only be charged once by a vendor for one specific amount. This ensures that credit card details are never exposed, mitigating the risk of fraud.

Greater Simplicity

For businesses that pay electronically, gone are the days of printing checks, chasing people down for signatures, stuffing checks into envelopes, and mailing checks out. Paying electronically is a much simpler and efficient process than dealing with paper checks. There are several methods for paying electronically which simplify the payment process, with the two primary methods being ACH transfers and virtual cards.

An ACH transfer moves money electronically from one bank to another. There are regular ACH transfers, which are cost-free and are processed within a few business days, and same-day ACH transfers which typically cost a small fee but allow for payments to be processed within the same business day.

Aforementioned virtual cards are another tool used to make payments electronically. Paying vendors with virtual credit cards is an instantaneous process which requires zero hassle and zero paperwork.

These simplified payment processes lead to quicker payments and the opportunity to capitalize on early-pay discounts if offered by vendors.

Cost Savings

The costs of processing and paying invoices are constantly underestimated. While the direct costs, such as paper, ink, and postage that go into check payments can run as high as $5 per check, ACH transfers cost a fraction of that.

Not only do electronic payments reduce costs for businesses, electronic credit card payments actually earn rebates. For example, a business that pays $10 million in vendor payments on their credit card could earn a 2% rebate, generating $200,000 in returns. Finance teams can strategically re-invest this cash back into their business to run more effectively and efficiently.

How Automation Enables Electronic Payments

Currently, businesses that automate their accounts payable process are paying vendors electronically more often.

While 53% of companies that are not automating make more than half of their payments with paper checks, only 33% that do automate pay with checks as often. Also, almost 50% of respondents that automate are originating more than a quarter of payments as ACH transfers. Meanwhile, only 30% of respondents that do not automate are leveraging ACH transfers as often.

MineralTree is a leading AP Automation solution that streamlines the end-to-end AP process. Teams that have implemented MineralTree have seen a full return on their investment within 60 day of implementation as well as added time savings.

Curious to learn more about how automation can help your team leverage electronic payments? Contact MineralTree for a personalized demo.


We're transforming accounting by automating Accounts Payable and B2B Payments for mid-sized companies. Our award-winning solution has helped over one thousand businesses transform accounts payable from a source of inefficiency and fraud risk to a secure and strategic profit center that provides visibility into key cost drivers.