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2015 AFP Payments Cost Benchmarking Survey
INTRODUCTION
The payments industry faces a rapidly changing environment. Indeed, the gap between
technological advances in the payments eld and traditional payments methods is noticeably
widening. To help bridge that gap, many payments professionals are pursuing eorts to
improve those systems. Within the U.S. the Federal Reserve has initiated the Faster
Payments initiative with the ultimate goal of building a new, fast and pervasive payments
system. The Clearing House has undertaken a multi-year project to design a real-time pay-
ment system to address gaps in payment processing to enable consumers and businesses
to securely send and receive payments. In the spring of 2015, NACHA—the Electronic
Payments Association
®
—approved its Same-Day-ACH (automatic clearing house) product.
Such eorts aren’t conned to the U.S.: note the Single Euro Payments Area (SEPA) in the
Eurozone countries, and Faster Payments in the U.K.
However, even as payment technologies advance, in the U.S. paper checks continue to be
the most popular payment method. The 2013 AFP Electronic Payments Survey revealed that
although declining, the use of paper checks still accounted for about 50 percent of a U.S.-
based organization’s business-to-business (B2B) transactions. That relatively high share
of check payments can be attributed to the ubiquitous nature of checks, tradition, the
challenges of converting to electronic payment methods, and sometimes complacency.
Corporate systems and routines are set up to handle a large number of checks; consequently
there may be some reluctance to alter a process that “works.” Additionally, implementation of
new processes often requires organizations to purchase new technology and train personnel.
For those nance professionals who do want to shift their organizations’ payment systems
from paper checks to electronic payments, they will need to make a strong business case to
justify the investment required for such a shift. To gain approval from senior management,
they will need to have a solid grasp of various payment method costs. Determining those
costs with any accuracy is challenging; such calculations are dependent on a number of
variables including existing bank relationships and nancial systems, and may be interpreted
dierently by various organizations.
In order to provide treasury and other nance professionals with a tool to gain more
granular information regarding the costs of various payment methods, the Association
for Financial Professionals
®
(AFP) conducted its inaugural Payments Cost Benchmarking
Survey. Survey participants had the option of either selecting cost estimates within dened
cost ranges or providing their best estimated cost as a dollar value. The survey questions
also distinguish between external and internal costs for payments: external costs include all
payments to an external party such as bank/payment provider fees, reporting, interchange for
credit cards, etc.; internal costs include any internal organizational resources that a
company considers part of the cost of payments such as personnel, technical equipment,
IT support, etc.
The results of The 2015 AFP Payments Cost Benchmarking Survey are backed by data
from over 500 respondents and conrm what the industry has suspected for a while: that
paper checks are considerably more expensive than some electronic payment methods.
The estimated median cost of a check transaction is $3.00,
1
the estimated median external
cost range of each ACH (automatic clearing house) credit transaction is between $0.26
and $0.50 per ACH Credit transaction, and the estimated median cost of a purchasing card
transaction is $1.50. These ndings provide nance professionals with solid data to build a
business case showing that switching to electronic payments could result in real cost
savings for their organizations.
1. All dollar figures in this report are in USD.