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While companies have been steadily moving towards digitalized payments, checks remain a large portion of the business-to-business payment ecosystem. To help accelerate the trend away from paper checks and toward digital payments, Fiserv Inc. announced a partnership Wednesday with Checkbook Inc., a push-payments processor, to enable its Carat operating system to support digital checks for payouts.
The deal is expected to help businesses that use Carat reduce their reliance on paper checks, which account for 42% of all B2B transactions, according to Fiserv. The new feature will enable businesses to send a payee a digital check via email that can be printed, then physically or digitally deposited into a bank account. In addition, businesses will have the option to initiate a payout through Carat via an automated clearing house deposit to a recipient’s bank account or through a credit to their credit card, debit card, or prepaid card, or a digital wallet.
“While digital payouts have grown in popularity in the last five years, a large proportion of payouts are still issued via paper check, either because customers prefer checks, or they meet specific payment needs,” Robert Clayton, vice president of digital payouts for Fiserv, says in a prepared statement. “Our collaboration with Checkbook to digitize check payouts will allow our clients to create better payout experiences for their check-preferred customers and capitalize on the speed and efficiency of digital payments.”
In addition to reducing businesses’ reliance on paper checks, having the option to create a digital check will provide a more secure form of payment for businesses, says Checkbook chief executive and founder PJ Gupta.
“That is exactly why we are excited to partner with Fiserv and help payors transition their recipient base to more modern payment methods, while at the same time converting a significantly more expensive and time-consuming payment option to a cheaper one for merchants,” Gupta says in a prepared statement.
