The automated clearing house payments have multiplied to overtake paper checks as the most popular form of business-to-business payments, according to a new Federal Reserve report.

U.S. businesses have long lagged the transition to electronic payments, preferring to keep using paper checks for various reasons, including the cost of implementing systems that might allow for electronic payments or an attachment to the settlement lag time that keeps the funds in their accounts longer. Now, the pattern is changing more appreciably.

“Over the past decade, U.S. businesses have shifted from checks to electronic methods, especially ACH, to make B2B payments,” the Fed study said. “Checks were the most used method for B2B payments in 2015 but have ranked fourth since 2021.”

Even though the Fed study was able to chart businesses’ move away from paper checks toward ACH payments, credit and debit cards as of 2024, a survey that year by the Association for Financial Professionals still showed a clear business inclination to keep using checks. The number of respondents reporting use of checks for payments surged to 91% in 2024, up from 75% in 2023, according to a report last year from the Association for Financial Professionals.

That’s despite a rise in recent years of check fraud across the U.S., including through mail theft and check-washing schemes.

Nonetheless, the Fed study this month also showed the total value of B2B payments is clearly moving away from checks. As the number of ACH payments has increased, the value of those payments has also climbed, nearly doubling to $70 trillion by 2024, up from $36 trillion in 2015, according to the Fed study.

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