Despite advances in automation, many businesses continue to rely on paper-based payment processes, leading to inefficiencies and integration challenges. While automation has streamlined various operational areas, payments remain fragmented, with checks and manual reconciliation still widely used. Companies seeking to modernize their accounts payable (AP) systems encounter barriers such as outdated infrastructure and resource constraints. As firms evaluate their payment strategies, the shift toward comprehensive AP automation is becoming a priority to enhance efficiency and reduce costs.
Previously, companies have adopted payment automation in a piecemeal fashion, implementing digital solutions only in specific areas rather than across the entire payment process. This fragmented approach has contributed to lingering inefficiencies, making it difficult to fully optimize workflows. Over time, financial institutions have introduced various digital solutions, including virtual cards and embedded payments, to address these challenges. Despite these efforts, adoption remains uneven, and businesses continue to face obstacles in fully integrating automated payment systems.
What Challenges Slow the Adoption of Payment Automation?
One major obstacle in payment automation is the reliance on legacy systems, which creates difficulties in integrating new digital solutions. Businesses often struggle with outdated technology that is not designed to support modern payment methods, making transitions complex. Additionally, resource constraints, such as a lack of technical expertise, further slow down adoption. Even when companies have access to advanced solutions like application programming interfaces (APIs), they may lack the necessary internal knowledge to fully implement and benefit from these tools.
Holly Tennent, director of B2B payment solutions and card product management at Bank of America, emphasized the ongoing reliance on paper transactions and the difficulties businesses face in modernizing their AP systems.
“We absolutely still have a paper problem,” she said. “We also have integration challenges that have hindered growth in the B2B space. And that comes down to two main reasons: technology and resources.”
Companies hesitant to overhaul existing processes may find it more practical to refine their current systems rather than adopting entirely new ones.
How Are Banks Supporting Businesses in Payment Modernization?
Financial institutions play a key role in assisting companies with payment automation by providing guidance and tailored solutions. Bank of America, for instance, offers businesses digital payment options such as virtual cards and electronic payment systems to streamline AP processes. Financial service providers also focus on addressing concerns related to process efficiency, fraud mitigation, and cost reduction to align with businesses’ strategic goals.
Tennent highlighted the challenges businesses face when choosing from a wide range of payment solutions.
“Every client has a unique story,” she said. “[We] like to simplify it through the lens of business challenges. What are the pain points keeping you up at night? What do you need in an AP automation solution to solve those challenges? And finally, what is your desired end state?”
Identifying key business needs is essential for determining the most effective automation strategy and ensuring a smoother transition to digital payments.
Despite ongoing efforts to digitize payments, checks continue to be used in business transactions, though their prevalence is expected to decline with time. Tennent acknowledged that while the adoption of electronic payments is increasing, checks may not disappear entirely.
“Checks may not completely go away,” she noted. “But automation is going to further widen the gap between check and electronic payments.”
Businesses seeking to stay competitive will have to adapt to emerging payment trends while considering the impact on their existing financial operations.
As more companies recognize the benefits of automated payment systems, the focus will likely shift toward full-scale digital integration rather than partial adoption. The next generation of business leaders, who are accustomed to digital-first solutions, may drive this transition more rapidly. Firms that invest in technological advancements and refine their payment strategies will be better positioned to navigate the evolving financial landscape without being hindered by legacy constraints. Understanding the available options and effectively utilizing existing resources will be critical for businesses aiming to improve efficiency and financial performance.
