Canada embraces electronic payments

Canada embraces electronic payments

Electronic purchasing, billing and payment for commercial goods and services will account for one third of all Canadian business transactions by 2008, according to a study by Visa.

Visa Canada says by the end of the decade more than a third of commercial transactions will be conducted electronically as companies look to achieve more efficiencies and save money.

According to the study, by 2008 the percentage of commercial purchases paid for electronically - using cards as well as electronic fund transfers, data interchange and wire transfers - will increase from 14% to 34%, while cheque payments will decline from 84% to 65%.

The study predicts that orders placed electronically, using methods such as e-mail, supplier Web sites, extranets, marketplace sites and e-procurement, will grow from 15% of total orders in 2003 to 40% by 2008. In contrast, the use of telephone and fax will decline from 75% of orders in 2003 to 51% by 2008.

The use of paper invoices received by companies will also decline. In 2003 90% of invoices received by companies were paper, but this is expected to fall to 65% by 2008 as electronic methods take over. Electronic bill presentment will grow from two per cent of total invoices received in 2003 to 14% by 2008. Transmission of billing information electronically - electronic data interchange - will grow from two percent of total invoices received in 2003 to 13% in 2008.

Commenting on the research, Robert Dye, president, Purchasing Management Association of Canada, says: "Electronic technologies are the answer for companies looking to reduce processing costs, increase management control, improve operational processes, and collect more useful data for corporate decision-making."

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