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Traditional vs. digital payments: What’s best for small businesses?

A small business owner using a laptop to pay bills online with a credit card.

One thing every business has in common, regardless of size, industry, location, or strategy, is the need to pay vendors, suppliers, and service providers. It’s so trivial, in fact, that most business owners don’t give it much thought. They just pay however their vendors ask them to, usually using traditional payment methods.

The problem is even small and medium-sized businesses (SMBs) often need to pay dozens of separate bills each month and this adds up in time, fees, and postage, depending on which payment method they end up using.

Since you’re probably already using digital payments online or through mobile apps to cover personal expenses, it may be time to consider doing the same for your business’s accounts payable (AP) needs.

In this article, we’ll compare traditional payment methods to digital business payment platforms, to help you figure out which arrangement is a better fit for your small business.

What’s considered a traditional payment method for SMBs?

Business-to-business (B2B) payments seem to be lagging behind consumer payments. As private consumers, we all send money to friends, family, and even some businesses using nothing but our smartphones.

But, when we put on our business-owner hat, we find ourselves using far less efficient traditional methods, such as:

  • Checks
  • Cash
  • Phone payments
  • Transfers done directly through the bank

These methods are tried and true and they’ve been around for ages. They are usually the options directly accepted by vendors, making them an automatic choice for many small businesses that don’t want to rock the boat.

But, maybe it’s time you rock it just a little and consider switching to digital payment platforms.

What are digital B2B payment platforms?

Digital B2B payment platforms, like Melio, allow businesses to pay all their bills in one place, through a website or an app.

These tools make AP management easier and more efficient, by allowing you to schedule payments in advance, use various payment methods according to your current cash flow needs, and have a clear record of every transaction.

How do digital and traditional payment methods compare

While many businesses are adopting digital payment solutions, traditional payments are still prevalent. In 2022, for example, the Federal Reserve processed 3.37 billion commercial checks, with a total value of $8.9 billion.

The popularity of traditional payment methods is probably due, at least in part, to their familiarity. Business owners are busy people and are often reluctant to make changes to their workflows. If it ain’t broke, why fix it, right?

Well, our comparison may show you that even if not broken, traditional payments are at least flawed. And, there’s a much better alternative.


Since they are physical objects, traditional payment methods like checks and cash can be misplaced, lost, or even stolen.

On the other hand, online financial fraud is a concern with digital payments and small businesses must take precautions to protect themselves against it. Still, digital payment systems are typically more secure, offering layers of protection and encryption, and the support of a larger company to ensure your money doesn’t fall in the wrong hands.


Paying with traditional methods requires alternating between writing checks, paying by phone, or sending a bank transfer in person at the branch or through your bank’s website. So, if you have several vendors, each with their own payment preference, you may find yourself going back and forth between the methods, which may not be the best use of your time.

Digital payment platforms, on the other hand, allow you to pay all your bills from one place, regardless of the selected payment or delivery method.

With Melio, for example, you can pay one vendor with an ACH bank transfer and we’ll send them a check on your behalf. For a 2.9% fee, you can also use your credit card to pay another vendor. They’ll get their money directly to the bank right away while you’ll get to hang on to cash longer, until your next billing cycle, and earn card perks.

You can also schedule your payments in advance to go out just in time. This way you can take care of all of your bills in one sitting, without depleting your cash reserves.

A digital payment system also saves your payment and vendor information, so you don’t have to look them up or retype them again and again. This both saves time and prevents errors that might result in lost funds.


Unless you personally hand your vendor a check or a cash envelope, traditional payments typically take longer. A mailed check can take days or even weeks to arrive and several more days for the bank to process it.

Digital payments take minutes to set up and typically arrive within 1-3 business days or even sooner. For an additional cost, most payment services also offer expedited same or next-day options if you’re really in a hurry.


With traditional payments, your vendor chooses your payment method for you. With digital platforms like Melio, you can pay however you like and they get their money however they choose.

You can even pay by credit card to extend your float and earn points when they only accept checks, and they’ll never even know.

This means both you and your vendor can choose what works best for each business and maintain your existing workflows.


Traditional payment methods can be costly when taking into account high bank fees, the price of physical checks, postage, and associated staff hours. Digital payment platforms save staff hours as there’s no need to rush to the post office or manually cut checks. They also don’t require the purchase of physical items like checkbooks, envelopes, or stamps.

Some payment platforms (like Melio) charge no subscription and offer free ACH bank transfers, so you don’t have to pay anything just to pay. Even paying by check if you have to is easier and cheaper with Melio than doing so manually. A Melio check will cost you just $1.5 in tax-deductible fees, instead of $10 per check, as estimated by Commerce Bank.


Traditional methods are harder to track as you need to register each in your books manually.

Digital platforms, on the other hand, automatically register each transaction and its status without requiring additional action on your part. They also integrate with your accounting software, making bookkeeping even easier.

Faster, better payments

While traditional payment methods are familiar, that doesn’t mean they’re as comfortable as an old shoe. They are often more expensive, less convenient, slower, and harder to track than digital payments.

So, when it’s time to pay your business bills, take a few minutes to sign up for Melio. The money and time you’ll save on AP will make it worth your while in no time.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.