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U.S. Bank/IAPP Study Projects Continued Migration from B2B Checks to Electronic Payments


In the next three years, businesses, government entities and non-profit organizations plan to double their use of paperless payment technologies, according to a new survey of accounts payable (AP) professionals. As a result, paper checks will shrink from more than 60 percent of a typical organization's payments to less than 31 percent.

More than 280 AP officers spanning 15 industries participated in the summertime 2010 survey conducted by U.S. Bank, International Accounts Payable Professionals (IAPP) and APQC.

Nearly 65 percent of those surveyed reported reduced paper check usage in 2010 compared to the year before. For organizations exceeding $5 billion in revenue, it's even more pronounced - three out of four report declining paper check use.

"While the survey indicates e-payment is growing across the board, the larger the organization, the more likely it is to be happening," said Kurt Adams, senior vice president of strategy and program management for U.S. Bank Corporate Payment Systems. "With manual paper checks contributing to the challenges many AP departments face, it's no surprise that organizations are looking toward electronic payments to address their pain points."

The trend is only going to accelerate, according to the survey's projections. Respondents said they plan to nearly double the use of purchasing cards, automated clearing house (ACH) and electronic funds transfer (EFT) in the next three years. Paper checks could constitute less than 31 percent of payments by 2014. Again, the largest organizations are moving the fastest: they anticipate only 13 percent paper payment by that time.

The e-payment migration might be happening even faster but for three points of perceived resistance reported by survey respondents:

  • Internal concerns over cost of conversion and capability of staff to handle it. This exists to some extent on all levels but is more pronounced in smaller organizations.
  • Differing views on the efficiency of paper checks. Top managers are more likely to believe that existing check systems work well. Lower level folks? Not so much.
  • Supplier resistance to accepting electronic payment -- cited by 84 percent.

Many believe that such resistance will crumble in coming years as financial institutions and payment providers step up recruitment of suppliers for e-payment. Recruiting should become easier as more suppliers who've made the switch report increased efficiency in their accounts receivables processes through improved cash flow, expedited cash application and the elimination of costly credit approvals and late payment collections.

"Electronic payments have emerged as an alternative means of conducting business, offering numerous tangible benefits for buyers and sellers alike," said Mark Brousseau, vice president of research and business development for IAPP-IARP-TAWPI. "The universal migration to e-payment makes perfect sense, as does the projection of greater momentum over the next three years, given the increasing pressure companies face to reduce costs and improve agility."

Officials from IAPP and U.S. Bank will discuss the survey findings in a webinar at 1:30 p.m. ET (10:30 a.m. PT) Thursday, Feb. 24. Click on this link for free registration. You can also find more detail in U.S. Bank's white paper, "Electronic Payments: Trends in Accounts Payable," posted on the IAPP website under "publications" and on www.usbpayment.com under "white papers."

About IAPP
International Accounts Payable Professionals (IAPP) is internationally recognized as the trustworthy guidance-setting association for the accounts payable profession. Serving members throughout the world, IAPP is the AP professional's global voice, chief advocate, recognized authority, acknowledged leader and principal educator on all AP operational, regulatory, leadership, tax, control and fraud-related topics. Together, the IAPP and its sister organizations, International Accounts Receivable Professionals (IARP) and The Association for Work Process Improvement (TAWPI), have more than 6,000 members in 70 chapters throughout the United States, Canada and the United Kingdom, and provide training, conferences, knowledge sharing, certification, online resources, AP Matters, AR Matters and today magazines, and more. For additional information, visit www.TheIAPP.org, www.TheIARP.org and www.tawpi.org.

About APQC
APQC is a member-based nonprofit and one of the world's leading proponents of knowledge management, benchmarking, and best practices business research. Working with more than 750 organizations worldwide in all industries, APQC provides organizations with the information they need to work smarter, faster, and with confidence. Visit us at www.apqc.org or call (713) 681-4020 and learn how to make best practices your practices.

About U.S. Bancorp
U.S. Bancorp (NYSE: USB), with $308 billion in assets as of Dec. 31, 2010, is the parent company of U.S. Bank, the fifth largest commercial bank in the United States. The company operates 3,031 banking offices in 24 states and 5,310 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

SOURCE: U.S. Bancorp

U.S. Bank Media Relations
Teri Charest, 612-303-0732
Mark Brousseau, 717-767-2574
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