Middle-Market Companies Expect to Transition to Exclusively Digital Payments Within the Next Five Years, Citizens Survey Finds

Treasury executives see distinct advantages to digitization

PROVIDENCE, R.I. – Corporate treasury departments are going paperless, and sooner than you might think, according to a new survey of more than 200 treasury executives conducted by Citizens. In fact, 94 percent of respondents who use checks today expect their company to transition to exclusively digital payments within the next five years.

While most mid-size businesses still use some form of paper payment for tasks such as paying employees, vendors and contractors, significantly fewer financial leaders view physical cash and checks as critical or important payment methods than did a year ago. Treasury executives also see distinct advantages to digitization. During the pandemic, companies who were more digitally advanced experienced far less disruption than those who were not. Nearly all respondents agree that digital treasury processes have helped with cash flow forecasting (97 percent), enhanced their financial visibility and control (96 percent) and positively impacted their company’s bottom line (91 percent).

“Mid-size companies are embracing digital payment methods and the pace of adoption will only accelerate from here,” said Michael Cummins, executive vice president and head of treasury solutions, Citizens. “As digitization takes hold, Citizens is focused on helping our clients navigate the landscape by providing customized payments solutions that are seamless, secure and convenient.”

The Citizens survey of 202 treasury executives at mid-size businesses ($50 million to $1 billion annual revenue) was conducted in February 2024. The survey assessed the adoption of various payment types and how businesses are continuing to adapt to the shifting payment technology landscape. Other key findings include:

• Adoption of digital payment methods continues to grow. Adoption of nearly all digital payment methods included in the survey increased year over year. For example, 84 percent of respondents report using business-to-consumer (B2C) payment alternatives (such as Venmo or Zelle), up from 58 percent a year ago, while 77 percent report using instant payments, up from 62 percent a year ago. On average, companies are using four different payment methods, the most common of which are B2C payment alternatives, instant payments, credit cards and Automated Clearing House (ACH) payments.

• With fraud risk top of mind, companies are trusting banks for payments support. According to the survey, perceived fraud and security risks are the number one factor holding companies back from leaning in on digitization. Further, even though less than one-third of respondents were impacted by fraud in 2023, 91 percent said they were concerned about it. With fraud risk top of mind, companies are increasingly choosing banks for payments support over third-party providers like fintechs. In fact, a higher proportion of respondents are relying on banks for support with their transactional needs compared to last year.

• Instant payments are increasingly important to companies. Seventy-seven percent of respondents report using instant payments, up from just 62 percent a year ago. Notably, 92 percent of respondents report using the real-time payments (RTP) network and 77 percent report using FedNow, indicating companies are using both channels as instant payment adoption grows.

The full 2024 Payment Trends report can be found here.

To hear more about the 2024 Payment Trends survey, join leaders from Citizens and Mastercard for a live webinar discussion on May 7. Register here.

Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens approach puts clients first by offering great ideas combined with thorough market knowledge and excellent execution, to help our clients enhance their business and reach their potential. For more information, please visit the Citizens website.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $220.4 billion in assets as of March 31, 2024. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,300 ATMs and approximately 1,000 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.