Apple hopes China knows what time it is 30
Counting eyeballs isn’t the only way to charge for Web ads 32
EA: Wait till it works before you sell it 31
Innovation: LED lights with brains 33
March 16 — March 22, 2015
The Check Killers
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Cloud companies are finally pushing U.S. businesses beyond paper billing and payments
PHOTOGRAPH BY 731; SOURCE: ALAMY (5) GETTY IMAGES (6)
“The U.S. is 20 to 30 years behind other countries in moving away from paper” While consumers keep making more of their daily finances digital—from online banking to Apple Pay—many U.S. companies remain wed to paper. The typical American pays 35 percent of her bills with checks, but most businesses complete more than half their transactions that way, according to researcher Crone Consulting. The federal government, banks, and the largest companies have invested in the servers, software, and staff needed to make transactions more efficient. Smaller businesses have held off, but there are signs that’s starting to change. Between preparation, approvals, postage, and the costs of dealing with occasional fraud, a business has to spend $5 to $25 to issue a paper check, compared with $1 to $2 for
the same payment made electronically, estimates Crone. In the past few years the European Union and governments in Latin America have begun to require or encourage businesses to switch to digital invoices. There’s been no such pressure in the U.S., which accounts for two-thirds of the 22 billion checks written each year, according to researcher Celent. “The U.S. is 20 to 30 years behind other countries in moving away from paper,” says Celent analyst Gareth Lodge. The domestic market for businessfocused digital payment software and services grew 10 percent in 2014 and will gain another 10 percent to reach $10 billion this year, Crone estimates. The growth is driven by a slew of Webbased programs designed to mesh
with a business’s existing accounting systems without pricey servers or other gear. There’s been a rush of acquisitions and new investment as well. “We see a huge opportunity in B2B payments because they are so far behind the times,” says Drew Hofler, senior director of financial solutions for SAP subsidiary Ariba. The company’s business-focused software AribaPay has processed $5 billion in payments since it launched a year ago. In September printer maker and business services company Lexmark International bought online payment processor ReadSoft. In February, Bill. com doubled the $50 million in venture capital it had raised since its 2006 founding, while processor First
