Replacing Risky, Costly, Paper Checks with Digital B2B Payments

There’s more than enough market research and data proving that finance will only defeat fraud by outsmarting it. That means both technologically and with human intervention. 

Almost certainly the weakest link in our collective payments security armor is the continuing use of paper checks and their methods of distribution. It’s easy money even for amateurs, but syndicates have long had a major presence in the check fraud underworld.  

In its 2024 AFP® Payments Fraud and Control Survey, the Association for Financial Professionals (AFP) found that business payments are the category most affected by check fraud. “Checks continue to be the payment method most often used by organizations. In this survey, 75% of respondents note that checks are being used at their organizations, with 34% reporting that over 25% of their payments are made via checks," per AFP. 

In another stunning stat, the same survey found that of organizations currently using checks, fully 70% do not intend to eliminate checks until 2026. The remaining 30% said they plan to eliminate checks use within the next two years. 

Bottomline’s Rita Hubner, VP of Solutions Consulting, doesn’t put much stock in these self-imposed 2026 deadlines to ‘kill the check’ despite the fraud risks.  

“I think it's going to depend on who they're doing business with,” Hubner said, adding that smaller organizations will be hesitant “to go with sophisticated electronic payment systems and adapt to new technology.” 

Some companies are charging fees if a trading partner won’t accept electronic payments, but that doesn’t go over well in a volatile economy. Or ever. And Hubner added that paper use will change over time as digital payments become the norm. Younger generations will impact how digital payments are adopted.  As Gen Zs begin to own businesses, provide services, become landlords and make business payment decisions in new careers -- all by digital means -- digital payment adoption will rise.  

Corporate use of checks will soon stop having an outsized influence on payment data as more vendors demand digital ways of paying and getting paid. 

The paper check is, if nothing else, an admirably durable payment instrument. Paper checks were not wiped out by the pandemic, as a great many Fintechs and critics of the U.S. Postal System foretold. Both keep defying predictions about their demise.  

Picking Digital Payment Favorites 

In a field of choice that includes two U.S. real-time rails, Hubner still counts ACH and Same Day ACH among her preferred business payment methods. She likes ACH for a few reasons. ACH payments are sent on a federally regulated network, are generally available at all financial institutions, and are considered a secure payment type.   

All that is needed to receive an ACH Transfer is a bank account and the routing number of a participating bank.  Lastly, ACH also typically offers lower fees because it’s all digital and eliminates many of the processing fees associated with cards or checks.  

And what about competition? The FedNow® Service and RTP® from The Clearing House promote instant payments, and come what may, payments made on instant rails are irrevocable and require the receiver to also be on the instant payment network. 

Instead of speed, some go for smarts. For example, Hubner’s also a fan of virtual cards, continuing a slow but steady upward adoption curve. 

Hubner thinks features like the programmability of spend limits, mobile convenience, one time use for payment, expense tracking, security protection and other controls that come with virtual cards for business payments are a smart and secure approach.  

B2B payment networks also make the cut, as the security of known vendors doing business on what is effectively a private business payments network has strong appeal. 

Confirmation of Payee (CoP) is an account verification service being rolled out in the UK.  This concept is a name checking standard that helps ensure funds are shielded from fraud. There are other ways of doing that, including the use of secure payments networks. 

“Bottomline spends a lot of time to ensure that vendors are who they say they are,” Hubner said. “On our premium ACH network, we've had zero fraud because we have validated the vendors on our network. We've confirmed who they are. We know their account numbers. We know they're real, and we know who you are.” 

If a company persists with vulnerable paper payments, they need to be smart about it. For example, Hubner said the Positive Pay service is a trusted method of controlling check fraud. But it’s not flawless. Those who want dramatic drops in fraud should consider a closed-loop B2B network, Hubner said, as her favored methods are consolidated there.