Many chief financial officers (CFOs) have not only helped their organizations weather the storm financially since the pandemic but have also implemented digital innovations that will improve their organizations’ payment operations over the long haul.
For example, 46% of firms are using regular ACH more often since the pandemic’s onset, according to Business Payments Digitization: A Path To A Better Balance Sheet, a PYMNTS and Corcentric collaboration that polled 400 CFOs across five industries.
That’s just one example: A full 71% of respondents said they have accelerated payments digitization during the past 18 months.
Digital Wallets Make Big Gains
Nearly all firms are making and receiving digital payments more often than they were before March 2020. They’re also making and receiving payments via manual, paper-based methods such as cash or checks less often.
Credit card-enabled digital payments, such as those made via supplier portal or digital wallet, have seen the greatest uptick in usage. Eighty-five percent of CFOs say their businesses are making more of such card-enabled digital payments now than in March 2020.
Digital payments made via direct deposit or PayPal are close behind, with 71% and 62% of CFOs saying that their usage of these two payment methods, respectively, has increased.
About half of the CFOs reported using three other digital payments methods more often: debit card (cited by 55%), wire (50%) and regular ACH (46%). Smaller percentages reported increased usage of same-day ACH (40%), real-time payments (24%), prepaid cards (13%), ePayables with virtual cards (15%) and cryptocurrencies (4%).
Investing in Healthier Balance Sheets
CFOs are investing in payments digitization in large part because they believe doing so can improve the health of their balance sheets. Fifty-nine percent say they believe that payments digitization is integral to a healthy balance sheet, and 38% say they accelerated digitization with their balance sheets in mind.
CFOs invest in payments digitization for other reasons as well. Those who have accelerated their payment digitization say that boosting payments efficiency and attracting and retaining customers are also key drivers.
Enhanced working capital improvement is the second-most common benefit firms have seen from digitization, following increased payments efficiency. Ninety-one percent of CFOs say their payments operations are more efficient after accelerating payments digitization. This improvement in payments efficiency and working capital can be seen among all firms regardless of size.
It is clear that payment digitization is playing a key role in CFOs’ broader strategies for improving their organizations’ financial health. Those from businesses that have invested in more digital payments operations believe these efforts will result in stronger, healthier balance sheets, whether that means having enhanced working capital, streamlined accounts receivable (AR) and accounts payable (AP) processes, or improved customer and partner satisfaction.
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