Is your business relying more heavily on legacy payment systems or more modern digital solutions? If you chose the former, you’re not alone, but you may want to consider the hidden costs associated with legacy payments.
While the world of consumer sales has quickly adopted digital payment solutions, modernizing and innovating how they do payments, B2B has been slower. In fact, according to an article from PYMNTS, “despite digital innovation, nearly 40% of B2B payments in the United States are still made by paper check.” Part of this is due to “resistance to change,” while another part of it is associated with a “disjointed user experience of many digital systems.” This is where it’s essential to work with an expert in the payment processing field to determine the best avenue for creating a smooth digital payment processing experience for the business and customer. You want something that will improve the experience, not hinder it.
But let’s discuss the hidden costs of legacy payment systems and why businesses need to be aware of them. From the surface, legacy payments like checks may seem like an easier, cheaper way of doing things, but unfortunately, that’s not true. There’s more going on under the surface. Let’s look at these hidden costs because the fees aren’t the whole story. Consider the wasted hours on manual reconciliation, the fraud risks, and the frustrated users.
Going back to the frustrated users, when it comes to making payments, users are less concerned about the infrastructure around their payment processing and more concerned about their experience using it. People want services that make life easier and lower the risk of fraud. Digital payment solutions do just that, from saving payment credentials safely (making the next payment a breeze) to lowering the chance of an error overall. Like PYMNTS quotes Murray Sharp, “Companies want to do business with companies that are easy.”
Now, let’s talk about the wasted hours. Think about the manual labor needed to print and mail invoices and checks, and submit all of the information into the system. Plus, there are the mailing costs on top of any payment processing fees. And then what if a payment is lost or late? Legacy payments can often hurt cash flow, as they take longer to be processed.
Fraud risks are also greater since checks can be easier to obtain and alter, creating losses for the consumer and the business. In addition, people are more apt to make errors than a digital system, which can cost the company even more.
Overall, these legacy payments can impede financial growth and are inadequate in today’s market. They can also hurt B2B relationships, as businesses want to work with companies that make life easier. If you’d like to explore ways you can make your company more efficient and innovate with modern payment methods, reach out to us at Richmond Financial Services. The landscape has changed. Find out if you’re paying too much now.
