Fed Finds B2B Payments Went Digital, Paperwork Didn’t
The Federal Reserve and researchers highlight a gap in business-to-business payments: electronic transfers have surged. Linking those payments to invoices, remittance data, and accounting records remains a bottleneck due to fragmented standards and aging software systems.
What changed in B2B payments
Payments from businesses have shifted toward electronic methods, with ACH use rising and paper checks declining. Despite this, the core issue is not speed but how well payment data travels with the money. Suppliers often receive a payment but cannot easily attach it to the exact invoice or remittance details needed for their accounting systems.
Key facts you should know
- Check payments fell from 4.6 billion in 2015 to 2.7 billion in 2024. The total value of B2B payments stayed around $15 trillion, indicating checks are being replaced but not fully digitized in data terms.
- Interoperability remains a bottleneck: different data formats, legacy ERP systems, and supplier portals don’t exchange information well.
- Recent infrastructure improvements exist, but connecting a payment to its underlying transaction remains the hardest part of digitizing B2B payments.
Who is affected
Businesses that pay and receive B2B invoices—suppliers, vendors, and their customers—are affected. The gap can slow reconciliation, create accounting errors, and require manual work to match payments to invoices.
Practical next steps
- Ask for standardized remittance data with electronic payments to reduce manual matching.
- Upgrade or standardize ERP and accounting interfaces to improve data compatibility with supplier portals.
- Evaluate whether your payment setup supports end-to-end automation from invoice to settlement, not just the transfer of funds.
Limits of the current findings and questions
The report notes infrastructure advances but does not propose a single solution for all firms. It also emphasizes that the issue is more about data interoperability than the speed of transfers. Readers may wonder how specific industries or company sizes are differently affected and what role standards bodies might play next.
Which sources did Setup in Bahrain review?
Setup in Bahrain reviewed the following source material before preparing this explanatory article.
The links remain visible so readers can inspect the evidence, compare dates and context, and confirm current requirements with the relevant authority.
- pymnts.com — evidence source reviewed for this article.
Information and responsibility notice: This article is general information based on the cited material available when published. It is not legal, tax, immigration, medical, financial, banking, or investment advice; it does not create a professional-client relationship; and it is not a guarantee of outcome, availability, accuracy, or eligibility. Rules, schedules, prices, and third-party information can change. Confirm material decisions with the relevant authority and an appropriately qualified adviser before acting.