Fed Finds B2B Payments Went Digital, but the Paperwork Didn’t
In 2024, the B2B payments conversation centered on moving businesses away from checks and toward electronic transactions. Two years later, the industry has made infrastructure advances, but two newly published research briefs from the Federal Reserve Bank of Cleveland highlight that the hardest part of B2B payments remains connecting the payment to the commercial transaction […] The post Fed…
In 2024, the conversation around B2B payments shifted towards electronic transactions, but recent research from the Federal Reserve Bank of Cleveland reveals that the real challenge remains connecting payments to the underlying commercial transactions. While electronic payments have become commonplace, the underlying procedures responsible for reconciling the transactions continue to present obstacles.
A recent study published by the Cleveland Fed titled "B2B Payments: Business Processing and Challenges to Achieving Straight-Through Processing" highlights fragmented invoicing standards, legacy accounting systems, and incompatible data formats as primary causes of the issue. Despite the digitization of B2B payments, the majority of transactions continue to be linked to manual processes, with the value of electronic checks remaining unchanged as businesses transition away from paper-based systems.
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