Electronic payments shifting landscape.

• Author: Heffes, Ellen M.
• Position: TECHNOLOGY

"People have been talking about the 'demise of checks' for years in the payments space, but paper-based payments have been holding on for dear life despite all predictions to the contrary," says James Gifas, head of RBS Citizens Treasury Solutions. "Finally, however, the ground is shifting."

Traditionally, explains Gifas, the focus has been on the "supply side"--the companies making payments. Their accounts payables departments have done their best to implement the latest innovations for payments, through ACH [Automated Clearing House] and corporate cards.

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But the real influence of adoption rates in the area of payment innovations, he says, has been the vendor side. "Until recently, many vendors continued to accept only checks for payment, with sporadic acceptance of ACH, depending on their systems' ability to process and apply payment--so the demand just wasn't there."

Now, with, the emergence of new technology systems and electronic payments networks, the focus has shifted to the vendors receiving payments. "This shift is finally creating the tipping point the industry needed in order to change," he adds.

Factors preventing an earlier move away from checks include onboarding challenges, bandwidth and cost issues and a reluctance to be first.

As changes in the technology have addressed these concerns, the initial reluctance to move away from checks has almost completely disappeared, says Gifas. Among the factors driving the trend:

* Payments networks themselves have mitigated the corporate burden of on-boarding...