The future of transactions

From cash to crypto, payment technologies have changed substantially over the years, shifting how businesses, including real estate management firms, transact with suppliers and service providers and manage financial operations. Today, B2B payment trends are evolving to leverage technologies that make transactions faster and more secure.

In our Real Estate Payment Trends guide, we share insights from our recent surveys of finance leaders and extensive industry research. Read on for a summary of our findings and learn more about the latest advancements in digital payments and real estate adoption. 

Goodbye, paper checks

In the last 20 years, paper checks have gone from one of the most popular payment methods to outdated. Data from the Association for Finance Professionals (AFP) shows that more than 80% of B2B payments in the U.S. and Canada were made by check in 2004. By 2023, that number dropped to 33%.

AvidXchange’s 2024 Trends Survey underscores this, finding that only 5% of organizations use checks most often to pay suppliers. It’s no surprise that businesses are moving away from paper checks given the pervasiveness of check fraud today.

A B2B Payment Security report conducted by AvidXchange and the Institute of Finance & Management (IOFM) found that 76% of organizations experienced payment fraud in the past year, with checks comprising the largest share of related financial damage. According to the same report, losses attributed to check fraud ranged from less than $50,000 to over $1 million. 

Hello, digital payments

Security isn’t the only driver influencing the move away from paper checks. Speed is another factor that’s impacting this real estate payment trend. AFP’s Digital Payments Survey Report notes that speed is the primary consideration impacting businesses’ payment method choice. 

According to the Consumer Financial Protection Bureau, banks typically take up to two business days to settle a check payment. And that doesn’t include the time businesses take to prep and mail that check to a supplier. Alternatively, digital payment methods like ACH are settled four times daily and real-time payments (RTPs) via FedNow are settled in seconds.

AFP found that 80% of finance professionals in the U.S. and Canada believe faster payments will have a “positive” or “very positive” impact on organizations. So, it’s no surprise that businesses, including real estate management companies, are leaving checks behind for faster payment methods.

Real-time payments expand

RTPs make payments about as fast as they can get, and adoption is increasing as the FedNow Service network grows. PYMNTS reports that real-time payment transaction volume is expected to hit $8.9 billion in 2026, quadrupling from 2022.

According to The Federal Reserve, at launch in July 2023, 35 financial institutions were participating in the FedNow Service Network. As of May 2024, that number had ballooned to 758. The 2024 Trends Survey conducted by AvidXchange echoed this growth, with 81% of respondents saying they’ve noticed increased demand for real-time payments like FedNow from suppliers. Adoption will likely grow as the FedNow Service network becomes more widespread and suppliers and service providers request this B2B payment trend more often.

AI impacts electronic payments

AI can transform digital payments by incorporating advanced features such as enhanced fraud detection and predictive analytics. These innovations are designed to add security and improve operational efficiency compared to paper-based payment methods.

AI-driven capabilities help protect businesses from unauthorized transactions, optimize cash flow management, minimize manual errors, and boost productivity. By integrating AI into digital payments, the transaction process can become more streamlined.

Benefits of following B2B payment trends

Following B2B payment trends away from paper checks and towards electronic payments offers potential organizational advantages, including:

Cost savings

Electronic payments help lower labor costs by mitigating time-consuming tasks like making check runs and filing paper receipts. Since electronic payments are processed faster than traditional checks, they can also help real estate management companies avoid costly late fees and take advantage of early payment discounts and rebate opportunities.

Efficiency

Electronic payments expedite transactions and help management firms reduce time spent on manual processing.

Most accounting and accounts payable (AP) software platforms directly receive statements from electronic payment platforms, facilitating automation of the reconciliation and reporting processes. By reducing paperwork and manual intervention, management teams can enhance productivity and focus on strategic work instead of time-consuming tasks.

Control

Transforming AP processes and payments into digital formats helps provide AP teams with real-time transaction visibility, allowing for proactive oversight and management.

Automated workflows are designed to expedite invoice and payment processing, helping reduce delays and enhance cash flow efficiency. Customizable approval hierarchies and audit trails help real estate management leaders retain control over their AP processes. And cloud-based, centralized systems can offer access anytime, anywhere, from any device.

Security

Electronic payment methods can provide management firms with substantial security benefits by helping reduce the risk of fraud. Unlike paper payments, digital transactions come with advanced encryption and security measures.

B2B payment trends: final thoughts

Many real estate businesses, including real estate management companies, are moving away from paper checks toward digital payment methods like RTPs and virtual credit cards. These modern payment platforms can offer organizations advantages like enhanced security, more efficient processing, and cost savings.

Today’s B2B payment trends help deliver convenience and agility to AP teams. Especially when integrating with existing AP and accounting software, digital payments are designed to enrich financial management and reporting within an organization, empowering businesses with the tools they need to maintain a competitive edge. 

AvidXchange is a trusted, leading provider of AP automation software and payment solutions for middle market businesses and their suppliers. AvidXchange’s Software-as-a-Service (“SaaS”) based, end-to-end software and payment platform digitizes and automates the AP workflows for over 8,000 buyer customers and has made payments to more than 1,200,000 supplier customers of its buyers over the past five years. Additionally, AvidXchange, Inc. is a licensed money transmitter for US B2B payments, licensed as a Money Transmitter by the New York State Department of Financial Services, as well as all other states that require AvidXchange to have a license.