Wholesale Distributors Still Highly Reliant on Accepting Paper Checks

While emerging technologies will play an important role in the supply chains of the future, having the ability to accept and reconcile check payments more swiftly is critical too.

Checks still represent a thriving percentage of payments in the wholesale space, so it is difficult for companies to avoid legacy payment methods entirely, as reported in “The Treasurer’s Guide to AR Payment Optimization,” a PYMNTS and CheckAlt collaboration.

Get the report: The Treasurer’s Guide to AR Payment Optimization

Developing ways for payments to run smoothly on both digital and manual channels will grant both distributors and their clients key advantages as supply chain payment needs evolve.

Avoiding Any Point of Friction

One solution from CheckAlt, for example, is a purpose-built mobile app that lets wholesale delivery drivers scan a check as one would do with a credit card.

These and other capabilities can help smaller wholesalers better compete in today’s environment, CheckAlt Director of Product Management Laurence Dunne told PYMNTS in an interview.

Read more: Wholesale Distributors up Their Tech Games to Compete With eCommerce Giants

“The more they can do to provide personal service — provide the kinds of service that the Amazons cannot provide — but at the same time be as efficient as the Amazons, … the more they can thrive,” Dunne said.

Being able to reconcile check payments more easily while also creating space for emerging, digital-first, B2B payment solutions could offer distributors key advantages.

Wholesalers must move swiftly to ensure they are offering seamless, innovative experiences that stand out to potential clients, and avoiding any point of friction from delivery to payment is essential.

Many wholesale distributors still rely on checks — paper or otherwise — to conduct most of their B2B payments, however, and reliance upon these manual methods is placing an increasing strain on such companies. Costly and time-consuming check payment processing could hamper cash flow or lead to payment delays.

Given these trends, wholesale distributors’ interest in electronic payment methods has also increased, with more and more companies adopting virtual or eCommerce channels to conduct a larger portion of their sales.

Many distributors are still reluctant to let go of checks fully, however, as they remain a dominant payment method, despite growing digital trends.

Enabling Swifter Check Payments Through Automation

Wholesale distributors are far from the only companies seeking to innovate their B2B processes without alienating the significant portion of their customer bases still looking to send and receive funds via checks. PYMNTS data show that many companies are beginning to view digitizing their accounts receivable (AR) and accounts payable (AP) processes as a strategically important move for their organizations.

The data also show that companies are wary of replacing their current processes or infrastructure entirely, however, with many seeking to tap digital technologies to speed up their established payment processes rather than completely revamp them.

A strategy that involves both innovating B2B payment processes to support emerging digital-first tools and enabling swifter check payments through automation could be key to meeting distributors’ shifting needs.