By Jessica Salerno-Shumaker, OSCPA senior content manager
As businesses integrate more technology into their daily operations, Steve Weber, co-founder of PaperTrl, warns of the overlooked consequences of sticking to traditional payment methods.
“Companies need to consider what they could be giving up when they forego using digital payments,” said Weber.
Weber said the biggest myth among payments is ACH can take three to five days to process.
“Typically, ACH is processed within 24 business hours by the banking system,” he said. “So, if someone's being told it's three to five days, it's usually because whoever's making the ACH on your behalf is holding on to the money to earn float from it. And that's really not something companies should accept as a viable payment option.”
For those who feel strongly about using only cash or check payments, Weber said he hears it makes them nervous to think about paying the 2-3% interchange fee on credit card transactions.
“But with credit card payments, you have the opportunity to have the credit card companies intervene in transactions and request chargebacks, which you can't do with checks,” Weber said. “And if you've been unhappy with a service that's been delivered by somebody, it provides you with more options to work toward resolution with a vendor than if you've already paid them cash for something.”
Shilpa Marano, cofounder of PaperTrl, said sometimes they hear from CFOs who are concerned payments will go out without their oversight because they’re no longer signing off on a physical sheet of paper. But she said the CFO can still give final approval via a type of digital method.
Fraud is still a serious consideration when using paper checks, Weber said, and they aren’t a guarantee of a safe transaction.
Marano said another benefit of technology with digital payments is that it can save substantial time and labor. Manual check runs and ACH payments require separate processes with a lot of additional work, but the digital payments consolidate it into one platform.
“You’re relying on the technology to execute the payments,” she said. “And all you really have to do is provide the input, the bill you’ll pay, the amount to pay in and the date. There's a tremendous amount of efficiency to be gained.”