Before that check goes in the mail. Electronic payment trends.

• Author: Sawrup, Anil
• Position: TREASURY TECHNOLOGY

In today's digital economy and growing move to an online world, it is becoming increasingly unusual to receive or send paper checks. The everyday financial reality includes the ongoing use of direct deposit, online banking transfers and many other types of electronic money movers. In fact, checks are quickly becoming quaint, old-fashioned souvenirs of the past that certainly lack efficiency.

And yet many companies--for whom efficiency and cost effectiveness are critical issues that directly affect their ability to compete in the global marketplace--are still hesitant to "go paperless" for payments. These are the same businesses that have embraced other innovations and improvements readily. Businesses that, since the near economic meltdown in 2008, began to invest more and more in infrastructure improvements, streamlining back office efficiencies and investing in technology that puts them in front of the pack.

Consider for example:

* Fast-food chain McDonald's Corp. announced in May 2011 its plans to virtually stop accepting cash in approximately 7,000 European restaurants, replacing cashiers with touch-screen terminals that allow customers to order and pay electronically

* A survey published by PayStream Advisors reports that approximately 80 percent of larger organizations expect to convert to electronic payments within the next three years.

Savvy finance professionals clearly recognize the significant, compelling upsides to achieving that conversion. Among these are cost savings, profit increases, stronger fraud controls, improved utilization of funds, efficient reconciliation and improved vendor relations--all of which can ultimately shift the paradigm of the traditional accounts payable department toward an invoice and payment-management process that delivers strategic benefits and vastly improved bottom-line results.

But despite such compelling reasons to switch from paying with paper, checks continue to dominate. In fact, most organizations make around 70 percent of their payments by paper check even though they understand the benefits of converting.

What's happening in boardrooms around the globe is a story about businesses' need and desire to adopt a wide range of electronic payments--from wire transfers to credit card payments, direct deposits, email payments and "tap-and-go" mobile payments on smart-phones--but whose decision to convert is mired in concerns and frustrations about the ability to get there.

Why the Hesitation to...