Financial Executives International Canada (FEI Canada)

Financial Executives International Canada (FEI Canada)
Central 1 Credit Union

Central 1 Credit Union

July 06, 2011 09:00 ET

Electronic Payment Adoption Critical for Efficient Cash Management

Financial Executives Prefer Electronic Payments but Face Obstacles to Introduction

TORONTO, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 6, 2011) - The ability to use electronic payments will play a critical role in the future success of Canadian companies, but a new survey released today found there are barriers slowing adoption of the technology.

Electronic payments in Canada: What's the hold up?, the latest study conducted by the Canadian Financial Executives Research Foundation (CFERF), found that while there are significant issues making wide-spread adoption of electronic payments in Canada a challenge for businesses, top executives indicated a high level of preference for increased electronic payments and identified substantial growth opportunities in the payments sector.

CFERF is the research arm of Financial Executives International (FEI Canada). The research study was sponsored by Central 1, the central financial facility and trade association for the B.C. and Ontario credit union systems and provider of payment services to large corporations across Canada.

The study found that Canadian financial executives are aware of the benefits of electronic payments and are actively using such methods to cut costs and speed payments. They are also looking for ways to improve on current electronic payment systems through standardization and integration.

"We've learned that Canadian financial executives are eager to adopt a wide range of electronic payment options because it benefits their business, as the recent postal strike demonstrated," said Michael Conway, Chief Executive and National President, FEI Canada. "But concerns over costs, processes, behaviors and security still need to be dealt with to make electronic payments compelling for both buyers and suppliers."

CFERF surveyed 190 senior financial executives across Canada who are responsible for making decisions regarding electronic payments within their organizations. The data from the nation-wide survey was combined with insights gathered from an Executive Research Forum held simultaneously via videoconference in Toronto and Vancouver. The findings of the study highlight what financial executives want to see to increase the usage of electronic payments in the future.

"The move towards electronic payments is a logical evolution for business. We handle payments processing for companies and financial institutions across the country and we find that one of the key challenges is often internal hurdles to change. Ease of use and managing the transition to a new system is always critical for any client," said Oscar van der Meer, Chief Technology Officer at Central 1.

The interest in electronic fund transfers is undeniable with vast a majority of respondents (86 per cent), saying they would prefer using electronic transactions over the traditional paper cheques (only 2 per cent prefer paper transactions). The study points out many benefits, including convenience, improved cash flow and reduced transactional costs.

Despite those potential benefits, only 27 per cent of executives reported that more than half of their companies' transactions are electronic. The barriers towards full-scale adoption of electronic payments identified by respondents are:

  • Modifying customer behavior (39 per cent),

  • Security concerns (35 per cent),

  • Difficulties in motivating suppliers to accept electronic payments (34 per cent),

  • Organizational constraints and priorities (31 per cent),

  • Lack of integration between electronic payment and current accounting systems (29 per cent).

Addressing these concerns are key to achieving wider adoption of electronic payments in Canada.

Moving forward, automating the reconciliation process for payments was identified as one of the major improvements executives plan to make over the coming year to advance the adoption of electronic payments.

Please click here to view the full report, Electronic Payments in Canada: What's the hold up?

THE CANADIAN FINANCIAL EXECUTIVES RESEARCH FOUNDATION (CFERF) is the non-profit research institute of FEI Canada. The Foundation's mandate is to advance the profession and practices of financial management through research. CFERF undertakes objective research projects relevant to the needs of FEI Canada's 2,000 members in working toward the advancement of corporate efficiency in Canada. Further information can be found at www.feicanada.org.

FINANCIAL EXECUTIVES INTERNATIONAL CANADA (FEI CANADA) is the all industry professional membership association for senior financial executives. With eleven chapters across Canada and 2,000 members, FEI Canada provides professional development, thought leadership and advocacy services to its members. The association membership, which consists of Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada's leading and most influential corporations. Further information can be found at www.feicanada.org.

Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $70 billion in assets and is owned primarily by its member credit unions, 45 in B.C. and 119 in Ontario. With offices in Vancouver, Mississauga, and Toronto, Central 1 provides a wide range of services such as liquidity management, direct banking, and flexible payment service solutions for a range of clients. For more information, visit www.central1.com.

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