Pandemic trends: digital payments up by 40%, cheques down by 50%

The ongoing switch to digital has been much talked about, but new figures released by Bank of Valletta (BOV) show the extent to which digital payments are overtaking traditional ones, with the Bank saying that the “drastic” shift is occurring within companies of all sizes.

In a statement released on Wednesday, BOV said that it has seen a nearly 40 per cent increase in local businesses shifting to its digital batch-payments system when compared to the same period last year.

“Over these past months, we’ve seen a drastic move towards digital payments by companies of all sizes, from small family business to large corporates,” said BOV’s Executive eBanking Franco Xuereb.

The other side of the trend is the steep decrease in cheque payments, by 50 per cent over the preceding year, with the traditional payment being “rapidly taken over” by payments over internet banking and other channels.

The Bank credited these changes to “a world-disruptive pandemic”, rapid changes in consumer behaviour, and lower margins, which together have caused a perfect economic storm which has exerted pressure on local businesses to re-think their strategic models and operational processes.

Moreover, the Bank said, the significant growth in digital buyers during the pandemic turbocharged companies’ digital plans, particularly in the payments sphere.

Tonia Naudi, Head Business Payments at Bank of Valletta, said that the business sector has been severely hampered by COVID-19.

She said that forward-looking business operators have moved from the traditional and costlier cash or cheque-based payments into more efficient and cheaper digital payments, noting that in a scenario where cost management is crucial for sound business profitability, embracing digital payment solutions can translate in augmented cost-effectiveness, speed and efficiency.

“Habitual use of traditional payment methods may give the perception of convenience, and until companies switch, the hidden costs of cash and cheques borne by such companies are rarely calculated,” explained Ms Naudi.

“Let’s say a company with 50 employees shifts its monthly salary payments from cheques to digital payments. Cheque payments would cost the company €600, whereas through the BOV Batch-Payments, it would incur just €72 – that’s a cost saving of €528. And this without taking into account slow payment turnaround, security risks, errors from manual intervention, storage space requirements and manual recording, filing and reconciliation of accounts.”

How batch-payments work

Through BOV Batch-Payments, supplier payments and salaries are batched into one file by the company issuing payments and uploaded as a single file on the BOV Internet Banking.

BOV to BOV payments are instant, whereas payments to beneficiaries whose account is held by other banks are carried out within 24 hours.

Bank of Valletta has a wide range of options for B2B payments and payments to and from other parties such as employees and customers.

Additional solutions include contactless EPOS terminals, internet and mobile banking and mobile to mobile payments, with all digital services coming at a competitively priced structure to encourage a business digital plunge.

Businesses targeting a more efficient and cheaper payment strategy can reach out to a BOV Payments specialist on paymentsbusiness@bov.com or can apply online here. Further information can also be found on BOV’s business site.