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Manual payments, slow approvals, and rising fraud risks are no longer acceptable in today’s fast-moving business world. For mid-market companies, the stakes have never been higher: every delay or error can impact cash flow, supplier trust, and your bottom line. The message is clear—modernize or risk being left behind.
We spoke with Mahesh Kedia, Head of Payments at onPhase, to uncover how innovations like AI and electronic payments are rewriting the rules. If you’re ready to future-proof your finance operations and outpace the competition, you won’t want to miss these insights.
Over the past 5–10 years, how have you seen B2B payments evolve?
It’s been a dramatic shift. A decade ago, payments were still heavily reliant on paper: checks, manual data entry, spreadsheets, and disconnected processes. Since then, we’ve seen a real push toward digitization and automation.
Electronic payment methods like ACH, real-time payments, and virtual cards have become much more mainstream. That shift isn’t just about convenience. It’s about cost reduction, process efficiency, and risk mitigation.
Another major shift is around integration. Payment platforms used to be standalone. Now, companies expect them to integrate with ERPs, accounting systems, and procurement tools. Integration is no longer a bonus; it’s an expectation.
We’re also seeing greater demand for visibility. Finance leaders want real-time data, not end-of-month reports. They need to know where cash is, what’s pending, and what exceptions need attention, and they want that insight without having to hunt it down.
What does “digitization of payments” mean in practice?
People often assume it just means switching from checks to ACH, but that’s a small piece of the puzzle. Digitization is about rethinking the entire payment lifecycle. That includes invoice intake, approval routing, payment execution, and reconciliation.
It’s also about access to data. With a digital system, teams don’t have to wait until the end of the week or month to see what’s going on. They get real-time insights, including payment statuses, trends, and outstanding invoices, all in one place.
And finally, it’s about the experience. Whether it’s your AP team or your suppliers, people expect clean, modern, intuitive platforms. Mid-market companies are increasingly adopting these systems because they’re more accessible, more affordable, and more necessary than ever.
What’s been the biggest driver of change in the payments space?
It’s a combination of speed, risk, and expectations. Finance leaders want to move faster with less friction. They need stronger controls and visibility to avoid fraud or errors. And the people they work with, both internally and externally, expect more from the process.
Think about consumer expectations. We’re used to instant confirmation, multiple payment options, and real-time tracking. That mindset is influencing B2B. When a supplier sends an invoice, they don’t want to guess when it’s getting paid. They want transparency. Businesses want the same on their side. They want control and clarity.
What legacy practices are starting to disappear? Which ones are still sticking around?
We’re definitely seeing the slow decline of paper checks. They’re still used, especially in certain industries or by smaller businesses, but more companies are actively moving away from them.
Manual data entry is also going away, at least in companies that have adopted automation. It’s inefficient, error-prone, and unnecessary. OCR and AI tools have made it possible to extract and validate payment information without all the manual lift.
What’s sticking around? Batch payments are one example. A lot of companies still process payments in large batches, especially if they haven’t moved to real-time capabilities. Manual invoice approvals are also still pretty common, which can create bottlenecks even after digitizing payment execution. And full integration remains a challenge. Many businesses have separate systems that don’t talk to each other, so they end up reconciling manually or duplicating work.
Why do paper checks persist when they’re so inefficient?
It comes down to comfort, legacy processes, and in some cases, supplier preference. But the true cost of checks is often hidden.
There are direct costs like check stock, printing, postage, and bank fees. Then there are indirect costs such as manual labor, delayed payments, reconciliation errors, and fraud risk. When you look at the full picture, checks are expensive and slow.
They’re also more vulnerable to fraud. Unlike electronic methods, paper checks are easier to forge, intercept, or reroute. And they lack traceability. It’s hard to know where a check is in transit or when it will be deposited. That uncertainty strains supplier relationships and creates more work for AP teams.
How is AI influencing fraud prevention in payments?
It’s becoming an essential layer of protection. Fraud schemes are more sophisticated now, and you can’t catch them all with just manual review or static rules.
AI helps by analyzing behavior patterns in real time. If a payment looks unusual, like the wrong vendor, inconsistent timing, or mismatched amounts, the system can flag it before the money moves. That kind of early detection is powerful.
It’s not just about blocking fraud. AI also supports accuracy. It reduces human error, especially when paired with automation. It can improve data validation, detect duplicate invoices, and guide exceptions to the right person.
That said, AI isn’t a silver bullet. It needs to be part of a broader strategy that includes encryption, approval controls, and employee training. But it’s a game-changer for prevention and peace of mind.
What are the strategic benefits of modernizing payments?
There are plenty of cost-saving arguments: less paper, fewer errors, lower fraud risk. But the strategic benefits go further.
First, there’s efficiency. When payments are automated, your team spends less time pushing paper and more time on high-value work like forecasting, analysis, or vendor negotiations.
Second, it improves supplier relationships. When payments are reliable, fast, and easy to track, suppliers are happier. That can open the door to early payment discounts or better terms.
Third, it helps with cash flow management. Better visibility means better decisions. You can see what’s coming, what’s delayed, and how to prioritize.
Finally, it makes your operations more scalable. As your business grows, you won’t need to keep adding headcount just to manage more payments. Automation gives you room to grow without adding complexity.
What do you see as the next evolution of payment automation?
We’re headed toward what I’d call hyper-automation. That means automating not just tasks, but entire workflows, with intelligence built in.
Think about systems that learn from your activity and recommend improvements. Or payments that trigger automatically when a business rule is met or data changes.
Supplier portals are evolving as well. Instead of just showing invoice status, they’ll offer real-time updates, document sharing, and communication tools, all self-service. That improves transparency and cuts down on back-and-forth.
We’ll also see more real-time payment adoption, and AI will play a larger role in forecasting and optimization. The next few years will be about smarter, more adaptive systems that help finance teams stay ahead.
For teams just starting to modernize their payments, what’s your advice?
Don’t wait for a major overhaul. Start where you feel the most friction. If it’s approvals, reconciliation, or visibility, pick one area and solve it well. That momentum can build across the team.
Also, bring the right people to the table early. AP doesn’t own this alone. IT, procurement, and finance leaders all touch the process in different ways. Alignment makes the whole process more successful.
And think beyond the transaction. Payment modernization isn’t just about getting money out the door faster. It’s about creating a smarter, more resilient back office that can adapt, grow, and make better decisions.
Conclusion
As Mahesh points out, modernizing payments isn’t just a tactical upgrade. It’s a strategic shift that can transform how finance teams operate and how companies grow.
From AI-driven fraud prevention to real-time payment visibility, the tools are here. What matters is how companies use them to build smarter, faster, more connected finance operations.
Curious how traditional payment methods stack up?
Check out this infographic for a quick side-by-side view of checks vs. electronic options — and what’s really costing your team time and money.
