Checks, ACH, & Wires…Oh My!
Checks have been around for hundreds of years. As their popularity grew over time governments began to formalize laws around their use. In 1959 a standard for machine-readable characters (MICR) was agreed and patented in the US for checks. This really opened the way for the first automated reader/sorting machines for clearing checks. As automation increased so too did the volume of checks being used.
Now we fast-forward to 2020. For the past 61 years checks have dominated the landscape. But the world is evolving. As individuals we rarely use cash and checks anymore in place of our credit and bank cards–and that’s assuming you still use a physical card. You may have already even moved to a form of digital payment.
The financial industry is experiencing a shift in medium of payments thanks–in part–to the digital transformation it is currently undergoing. Customers–both B2C & B2B–are considering reevaluating their current relationships because despite the trust and loyalty that has been established they are able to find more services, faster response times, and simple-to-use digital platforms elsewhere.
We’ve utilized electronic payments for a while. ACH & Wires have been in use, but both come with drawbacks. While ACH is more secure than paper checks you are still required to provide your sensitive account information and data which is an exposure point for fraud. Remittance details are also usually insufficient with ACH payments requiring manual intervention at some level. When trying to automate your payments this can be a real hassle. Wire transfers are great when you are running against the clock or in the event of an emergency or unlikely scenario. Otherwise you run into similar security and control concerns.
Virtual Cards
So, out of all the options available–virtual cards, credit cards, ACH, wire transfers, and checks–here are the top three reasons why you should start using virtual cards:
Security
You no longer need to share your account or bank information. All of that sensitive data stays with you. Couple that with two-factor authentication and one-time transactions for specific amounts and you’ve got top-level security for all of your payments
Control
Because you set one-time transactions with specific amounts each virtual card payment can’t be charged for more than the set amount. Not only does this save you time but you’ll also have greater control over your cash flow scheduling payments with greater visibility.
Benefits (to your customers, vendors, & you)
Virtual cards offer the strongest and most consistent benefits of the options. Gain rebates and rewards for every single payment you make with virtual cards and reap the benefits over time. Just imagine if every payment you made today earned you rebates and rewards.
The next standard is here–are you ready?
While this top 3 list might not be endearing enough–we’re looking to increase our use of kitten gifs in the near future–to get you to change your current payment processes also consider that we are undergoing a massive–aforementioned–transformation. One that will usher in digital efforts, fintech solutions, and a world ever-aimed at reducing spend and increasing value-add efforts.
When we use words like transform and modernize we aren’t attempting to scare you away from the current standards but rather show you the standards of tomorrow so you have the information and tools you need moving forward.
