What’s the best business payments solution for you?

Running a business comes with its fair share of challenges, but managing payments shouldn’t be one of them. Having the right payment solution can make all the difference in improving your cash flow and relationships with suppliers and customers.

According to a recent PYMNTS Intelligence report, late payments were a top issue for small to medium-sized businesses, disrupting accounts receivables and negatively impacting their supplier relationships. 

But with so many options available, how do you determine the best payment solution for your business needs? Let’s look at some of the most popular options, their pros and cons, and see which solution is emerging as a transformative option for businesses today.

Common types of business payments solutions

1.  Checks

For decades businesses relied on checks as the primary method for payments. While still widely used in some industries, their popularity has waned due to inefficiencies.

 Pros:

•  Familiar and easy to use.
•  No need for internet access.
•  Provides a tangible paper trail.

Cons:

• Slow processing times.
• Risk of fraud and forgery.
• High administrative costs (e.g., printing, mailing).

2.  ACH transfers

Automated Clearing House (ACH) transfers are electronic payments that allow businesses to send money directly to a supplier’s or employee’s bank account.

Pros: 

• Cost-effective compared to wire transfers.
• Reliable and secure.
• Good for recurring payments like payroll.

Cons:

• Limited real-time capabilities, transactions can take 1-3 business days.
• Potentially complex setup for businesses with multiple banking relationships.
• Limited ability to dispute or reverse transactions.

3. Credit and debit cards

Widely accepted across industries, credit and debit cards provide convenience and speed.

Pros: 

• Instant payment processing.
• Rewards and cash back incentives (credit cards).
• Easy for vendors to accept.

Cons:

• Transaction fees can add up, especially for small businesses.
• Risk of fraud or chargebacks.
• Limited control over spending unless managed carefully.

4. Wire transfers

Wire transfers offer a secure way to send large sums of money quickly, often internationally.

Pros: 

• Speedy transfer of funds, often same day or one business day for domestic payments.
• High security standards, often requiring identity verification from both the sender and receiver.
• Suitable for large transactions.

Cons:

• High transaction fees.
• Irreversible once initiated.
• It requires precise banking details to avoid errors.

5. Virtual cards

Virtual cards are digital payment tools tied to a business’ bank or credit account. They’re generated for single or recurring transactions and can be customized with spending limits.

Pros: 

• Enhanced security (unique card numbers for each transaction reduces fraud risk).
• Simplified expense management
• Visibility over transactions
• Control over spending (e.g., setting limits, expiration dates, controls)
• Eliminates physical card related issues like theft or loss.
• Integration with accounting software.

Cons: 

• May involve a learning curve for businesses new to technology.
• Some vendors may not yet accept virtual cards.

Factors to consider when choosing a payment solution

The best payment solution for your business depends on several factors, including:

1. Business size and industry: Small businesses with low transaction volumes may prefer simple solutions like check or debit cards, while larger enterprises with complex needs might lean towards ACH transfers or virtual cards.
2. Transaction speed: If immediate payment is a priority, wire transfers, credit cards, or virtual card payments are ideal. For less time sensitive payments, ACH transfers are checks may be enough.
3. Cost: Transaction fees, administrative costs, and potential fraud expenses should be factored in.
4. Security: With cyber threats on the rise, choosing a secure method like virtual cards can protect your business from data breaches and fraudulent activities.
5. Control and visibility: Solutions like virtual cards offer unparalleled control and visibility into spend, making them particularly appealing for businesses with multiple employees or departments handling expenses.

Why virtual cards are a smart choice

Virtual cards address many of the pain points associated with traditional payment methods. Let’s dive deeper into why they stand out:

Security

Each virtual card is generated with a unique 16-digit number that can be tied to a specific transaction or vendor. This reduces the risk of unauthorized charges or data breaches. Even if a virtual card number is compromised, it cannot be reused elsewhere.

Expense management

Unlike other payment methods that require manual tracking or reconciliation, virtual cards provide instant visibility into spending. Businesses can track transactions, assign them to specific projects, and simplify the accounting workflow. Paired with an automated AP solution, virtual cards offer a payment process that is streamlined, allowing you to focus on business growth and strategies.

Customizable controls

Virtual cards allow businesses to set spending limits, expiration dates, and usage restrictions. This level of control minimizes overspending and ensures that funds are used appropriately.

Improve your supplier relationships

By using virtual cards, businesses can ensure timely payments, reducing friction or unnecessary delays with suppliers. Additionally, the detailed transaction data provided makes it easier to resolve disputes or answer any inquiries that your suppliers may have.

Ultimately, choosing the best payment solution requires careful consideration of your business’ needs. While traditional payment methods still have their place, innovative solutions like virtual cards are redefining how we pay. They offer a future-ready, scalable option that allows businesses to operate smarter, not harder.

For more insights and updates on corporate payments, check out:

• Your guide to virtual card rebates
• 2025 payment trends
• Is the secret to better cash flow management AI?

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The information in this blog post is for educational purposes only. It is not legal, tax or investment advice. For legal, tax or investment advice, you should consult your own legal counsel, tax, and investment advisers.