Digital payments have changed how businesses manage cash flow and streamline operations, particularly in the B2C market. Yet many organizations still send refunds, claims, settlements, and rebates by paper check, even as consumers increasingly favor digital options and the cost and administrative burden of checks become harder to justify.

In a highly competitive space where speed and agility are increasingly important, organizations that align their payment strategies with customer expectations can uncover substantial cost efficiencies and strengthen resilience.

Modernizing disbursements can help organizations control costs, improve financial visibility, reduce risk, and strengthen the customer experience. Just as importantly, giving customers greater choice in how they receive funds can help turn payments from a back-office process into a source of greater financial and operational flexibility.

The financial case for moving beyond checks

Rising costs for goods, services, and labor have strained operating budgets, making efficiency and cost control increasingly important. Huntington Wealth Management’s 2026 Beyond Business Midyear Report found that 95% of business leaders cited the higher cost of doing business as their top business concern over the next 12 months.

Against that backdrop, payment modernization might not be one of the first areas leaders look to for savings, but it should be.

Digital payments can offer a pathway to financial stability by:

• Shortening payment cycles and reducing manual exception handling.
• Lowering costs associated with issuing checks, which can range from $2.01 to $4 per check¹.
• Preserving control over payment timing while increasing operational responsiveness.
• Reducing financial risks, such as unclaimed property liabilities and fraud exposure.

The math can add up quickly. An organization issuing 50,000 refund checks annually could spend roughly $100,500 to $200,000 on issuance alone, before accounting for reissues, stop payments, reconciliation and escheatment administration.

The opportunity, however, extends beyond reducing check costs. Modernizing how funds are disbursed can also change who controls one of the most important parts of the transaction: how the customer receives the payment.

Payment choice as a business strategy

Historically, businesses determined how customers received payments. Often, that meant mailing a check. Today, consumers increasingly expect a choice of digital payment options, including PayPal, Venmo, gift cards, direct deposit, and virtual cards. Businesses are responding to that shift: 39% of surveyed businesses report their primary reason for using faster or instant payments is the flexibility to pay how customers prefer². This shift reframes payment choice from a customer-experience feature into an operational strategy.

Putting the choice in the payee's hands pays off for the business, too. When customers can select a method that's convenient for them, payments are more likely to be redeemed quickly, which means fewer uncashed checks, lower unclaimed property exposure, and fewer service calls.

The effect can be particularly meaningful for lower-dollar disbursements. Huntington's health care research reports that 47% of checks under $40 in the patient reimbursement context are never cashed³, leaving providers carrying unclaimed balances and potentially incurring additional costs to resend checks.

From a business standpoint, offering more choices can support greater payment acceptance and redemption, which in turn can help reduce outstanding balances and the administrative burden associated with unresolved payments.

Maintaining control without relying on check float

Despite the costs associated with checks, replacing them can raise valid concerns about liquidity and working capital management. Many organizations are accustomed to the timing associated with issuing and clearing checks. Replacing that with faster digital payments might appear to mean giving up some control over when cash leaves the business, but it doesn’t have to.

Modern payment processes can preserve many of the controls companies value in check-based disbursements while improving predictability and visibility:

• Scheduled payments can give companies greater control over payment timing, allowing funds to be released according to defined payment terms rather than relying on the variable timing of check issuance, delivery, and deposit.
• Organizations can pair negotiated payment terms with scheduled digital disbursements to execute payments predictably at the agreed time.
• Integration with enterprise resource planning (ERP) systems can give organizations greater visibility into payment information and support cash flow management.

The distinction is important. Organizations do not necessarily have to choose between faster payments and disciplined working-capital management. Instead, the opportunity is to replace the uncertainty associated with check float with greater control over when and how a payment is initiated.

Payment infrastructure and adapting to external market pressures

Customer preference is only one reason organizations may need greater flexibility in their payment infrastructure. Changes in regulation, economic conditions, and business requirements can expose weaknesses in legacy processes, especially when those processes depend heavily on manual intervention. In these situations, adapting quickly to external factors will likely be the hallmark of a successful business.

The No Surprises Act is one example that illustrates how regulatory change can expose weaknesses in legacy payment processes. Its good-faith-estimate requirements have contributed to new reimbursement challenges as some providers contend with patient overpayments and growing credit balances. This is a significant problem for an industry with inefficient refund processes. Issuing those refunds can add time, administrative expense, and unclaimed-property complexity. Providers that offer patients digital payment options can issue prompt refunds and avoid frustration for both providers and patients.

Building more flexibility into disbursements can give an organization additional avenues to respond when regulations change, while allowing financial leaders to adapt to changes quickly and maintain controls necessary to manage the business.

Real-time data: The visibility advantage

Another advantage of modern payment platforms is greater visibility into the payment process. Traditional check-based processes can leave organizations waiting to determine whether a payment was received or redeemed. Digital platforms offer visibility that can transform financial management and the revenue cycle by supplying the data needed to make informed decisions quickly.

Businesses across industries rely on real-time reporting to:

• Spot and resolve discrepancies before they escalate.
• Monitor disbursement status and outstanding payments.
• Compare redemption rates across payment methods.
• Identify patterns in payment-method adoption.
• Track exceptions and look for opportunities to improve process.
• Allocate resources more effectively to support growth and innovation.
• Measure cost per payment as digital adoption expands.

Getting started with digital payments

Shifting away from checks is a significant undertaking, but the benefits of incorporating digital payments into your organization's disbursement processes and revenue cycle can be worth the effort. Organizations evaluating a transition can start by:

1. Establish the baseline. Quantify check volumes and the fully loaded cost of issuance, reconciliation, exceptions, reissues, and unclaimed-property administration.
2. Prioritize the right use cases. Identify high-volume payment flows where check costs, low redemption, or customer friction are greatest.
3. Define integration and control requirements. Determine how payment data must connect with ERP, treasury, reconciliation, and reporting processes.
4. Measure outcomes. Track cost per payment, digital adoption, redemption rates, exception rates, and time to receipt or redemption.
5. Scale based on evidence. Expand to additional use cases after establishing operational and financial results.

Building a more adaptable payment strategy

For organizations still relying heavily on checks, evaluating digital disbursements can begin with a straightforward comparison: the fully loaded cost and operational demand of today’s process, the financial risks it creates, and the value of giving customers greater choice in how they receive funds.

Learn more about how ChoicePay can help you modernize payments, reduce costs, and give customers greater flexibility in how they receive payments.