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Published on 21 August 2025•8 minutes

Supplier payment automation: Reducing manual processing costs

Airwallex Editorial Team

Supplier payment automation: Reducing manual processing costs

Every month, finance teams across Canada spend countless hours processing supplier payments manually. From keying in payment details to reconciling invoices, these repetitive tasks drain resources that could drive strategic growth. The average check-based transaction costs approximately $3.00, while an ACH transfer will almost always cost less than $0.50 to complete ¹. This stark difference highlights just one aspect of the hidden costs lurking in manual payment processes.

As businesses scale, the volume of supplier payments grows exponentially. What starts as a manageable weekly task quickly becomes an overwhelming burden that consumes entire departments. Payment automation is any tool a business uses to automate their process of paying vendors, including payments made via ACH transfer, check, wire, and virtual card payment ¹. Forward-thinking companies are discovering that automating these workflows doesn't just save time – it fundamentally transforms how they manage cash flow and vendor relationships.

The true cost of manual payment processing

Manual payment processing carries costs that extend far beyond the obvious labour expenses. When finance teams process payments manually, they're not just spending time – they're introducing risks and inefficiencies that compound over time. The likelihood of check fraud is nearly three times higher than fraud conducted via ACH transfer ¹. This elevated risk translates into potential losses that can devastate small and medium businesses.

Consider the workflow of a typical manual payment process. Staff members must verify invoice details, obtain approvals, prepare payment instructions, execute transactions individually, and then reconcile each payment against bank statements. Each step presents opportunities for errors that require additional time to identify and correct. Payment automation reduces or eliminates the chance of duplicate payments, input errors, or missed payments due to oversight ¹.

The opportunity cost proves equally significant. Finance professionals spending their days on manual data entry cannot focus on strategic initiatives like cash flow optimization or vendor negotiation. In North America, consumer payments generate the majority of revenue at 63% where markets remain mostly card driven ². This shift toward digital payments makes manual processing increasingly obsolete and costly by comparison.

Understanding bulk payment capabilities

Bulk payments represent a fundamental shift in how businesses handle multiple transactions. Rather than processing each supplier payment individually, bulk payments process multiple transactions at once through a single submission, improving efficiency and reducing administrative work ³. This capability transforms what once took hours into a task completed in minutes.

The mechanics of bulk payments rely on sophisticated infrastructure. To execute bulk payments, businesses typically use a system that includes payee lists with recipient details, bank-compliant payment files, internal approval workflows for oversight and compliance, and payment gateways or banking integrations ³. These components work together to ensure accuracy while maintaining the control and visibility finance teams require.

Bulk payments are used across industries, including manufacturers for payroll, retailers for supplier payments, and gig economy platforms to pay thousands of contractors ³. The versatility of bulk payment systems makes them valuable for businesses of all sizes, from startups managing a handful of vendors to enterprises coordinating thousands of supplier relationships globally.

Airwallex's Bill Pay solution exemplifies modern bulk payment capabilities, enabling businesses to manage and pay multiple bills efficiently through a single platform ⁴. The system integrates seamlessly with existing accounting workflows, eliminating the need for manual data transfer between systems.

Calculating your automation ROI

Quantifying the return on investment for payment automation requires examining both direct cost savings and indirect efficiency gains. Merchants paid approximately $138 billion in processing fees in 2022 ². By automating payments and choosing optimal payment methods, businesses can significantly reduce these fees.

Direct savings emerge from multiple sources. Labour costs decrease as staff spend less time on manual tasks. Transaction fees drop when businesses shift from expensive payment methods to more efficient alternatives. Error-related costs vanish as automation eliminates manual data entry mistakes. The payment gateway market was estimated to be worth $127.1 billion in 2023 ², reflecting the massive scale of digital payment infrastructure investments globally.

Indirect benefits prove equally valuable though harder to quantify initially. Faster payment processing improves vendor relationships and can unlock early payment discounts. Enhanced visibility into cash flow enables better financial planning. Reduced fraud risk protects the bottom line. Payment automation and electronic payments allow businesses to capture far more financial data, an essential benefit for companies looking to conduct analytics and improve their efficiency, processes, and payment strategy ¹.

Consider a mid-sized Canadian retailer processing 500 supplier payments monthly. Manual processing at 15 minutes per payment consumes 125 hours of staff time. At $40 per hour, that's $5,000 in labour costs alone. Add transaction fees, error corrections, and opportunity costs, and the monthly expense easily exceeds $7,500. Automation can reduce processing time by up to 80%, delivering immediate monthly savings of $6,000 or more.

API integration and workflow optimization

Modern payment automation relies heavily on API integration to connect disparate systems seamlessly. APIs enable real-time data synchronization between accounting software, payment platforms, and banking systems. This connectivity eliminates manual data entry and ensures consistency across all financial systems. Airwallex enables businesses to send and receive funds across more than 150 countries ⁵, demonstrating the power of well-integrated payment infrastructure.

Workflow optimization through automation extends beyond simple payment execution. Invoice processing represents a significant aspect of payment automation – taking in invoices from various sources and in various formats, interpreting the information they contain, storing it, and then completing a review process ¹. This comprehensive approach ensures that every step from invoice receipt to payment confirmation operates efficiently.

The integration process typically follows a structured approach. First, businesses map their existing workflows to identify automation opportunities. Next, they configure API connections between systems. Then, they establish approval hierarchies and payment rules. Finally, they test the integrated workflow before full deployment. Airwallex's accounts payable automation solutions demonstrate how modern platforms streamline these complex integrations ⁶.

Real-time payment systems like RTP in the United States enable instant settlement and confirmation, moving away from traditional multi-day clearing cycles ⁷. This shift toward instant payments makes API integration even more critical, as businesses need immediate visibility into payment status and cash positions.

Implementation strategies for growing businesses

Successful payment automation implementation requires careful planning and phased execution. Growing businesses should start by assessing their current payment processes to identify pain points and inefficiencies. The Automated Clearing House announced that they will be increasing the limit on RTP transactions to 10 million, a 10 times increase over their higher limits ⁸. This expansion creates new opportunities for businesses to leverage automated payment systems at scale.

The implementation roadmap should prioritize high-volume, repetitive payment processes first. These offer the quickest wins and help build organizational confidence in automation. Start with recurring supplier payments, then expand to include one-time payments and complex approval workflows. Airwallex's invoice processing capabilities show how businesses can gradually automate different aspects of their payment operations ⁹.

Change management proves crucial for successful adoption. Finance teams need training on new systems and processes. Vendors require notification about payment method changes. Internal stakeholders must understand the benefits and their roles in the automated workflow. Clear communication and gradual rollout minimize disruption while maximizing buy-in.

Security considerations cannot be overlooked. Cybersecurity and fraud risks are major concerns in the digital payment market, with increased danger of fraud, data breaches, and cyberattacks ¹⁰. Businesses must ensure their chosen automation platform provides robust security features including encryption, multi-factor authentication, and audit trails.

Measuring success and continuous improvement

Establishing clear metrics enables businesses to track automation success and identify improvement opportunities. Key performance indicators should span efficiency, accuracy, and financial metrics. Processing time per payment, error rates, and cost per transaction provide immediate feedback on automation effectiveness. Digital wallets are forecast to be used in 61% of digital transactions in 2028, up from 50% in 2023 ², indicating the rapid evolution of payment preferences that businesses must track.

Regular performance reviews reveal optimization opportunities. Analyze payment patterns to identify candidates for further automation. Review approval workflows to eliminate bottlenecks. Monitor vendor feedback to ensure the automated process meets their needs. Airwallex's expense management tools demonstrate how continuous monitoring improves financial operations ¹¹.

Benchmarking against industry standards provides context for performance evaluation. Global Payments revenues grew at 11% in 2022 to another all-time high of $2.2 trillion ². Understanding these broader trends helps businesses set realistic automation goals and identify emerging opportunities.

Continuous improvement requires staying current with payment technology advances. Major retailers are expected to adopt account-to-account payment methods, underpinned by real-time payments in 2025 ⁸. Businesses that regularly evaluate and adopt new payment methods maintain competitive advantages.

Future-proofing your payment infrastructure

The payment landscape continues evolving rapidly, making flexibility essential for long-term success. The forecasted market value of the digital payment industry by 2033 is $32.07 trillion ¹⁰. This massive growth signals fundamental shifts in how businesses and consumers handle payments.

Scalability becomes paramount as businesses grow. Payment automation systems must handle increasing transaction volumes without proportional cost increases. Airwallex is seeking to pass $1bn in annualised revenue by Q4 2025 ⁵, demonstrating the scale modern payment platforms can achieve. Choose solutions that grow with your business rather than requiring replacement at each growth stage.

Cross-border capabilities increasingly matter even for domestic businesses. Global ecommerce sales surpassed 6 trillion dollars in 2023, and forecasts suggest they will grow to over 8 trillion by 2026 ⁷. As supply chains globalize, businesses need payment systems that handle multiple currencies and international regulations seamlessly.

Regulatory compliance adds another layer of complexity. The Fedwire Funds Service is expected to migrate to ISO 20022 in March 2025 ⁸. Payment automation platforms must adapt to these technical standards while maintaining operational continuity.

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Taking action on automation

The case for supplier payment automation grows stronger daily. Manual processes cannot scale efficiently, introduce unnecessary risks, and waste valuable resources. The compound annual growth rate of the digital payment industry from 2024 to 2033 is 13.5% ¹⁰, reflecting the unstoppable momentum toward digital transformation.

Start your automation journey by auditing current payment processes. Document time spent, costs incurred, and errors encountered. This baseline enables accurate ROI calculations and helps prioritize automation initiatives. Understanding accounts payable fundamentals provides the foundation for successful automation ¹².

Evaluate automation platforms based on your specific needs. Consider integration capabilities, security features, scalability, and vendor support. Request demonstrations focused on your use cases rather than generic features. Airwallex's invoice processing software systems showcase the comprehensive capabilities modern platforms offer ¹³.

Begin with a pilot program targeting high-impact processes. Measure results carefully and refine the approach before expanding. Success in initial automation efforts builds momentum for broader digital transformation. Remember that payment automation doesn't just manage the process of approving payments for manual sending, but will actually complete payment once the automated process of approval has been completed ¹.

The transition from manual to automated supplier payments represents more than operational improvement – it's a strategic investment in your business's future. Companies that embrace automation today position themselves to capitalize on tomorrow's opportunities while those clinging to manual processes risk falling behind in an increasingly digital economy.

FAQ

What is supplier payment automation and how does it reduce costs?

Supplier payment automation is technology that streamlines the entire payment process from invoice approval to payment execution. It reduces costs by eliminating manual data entry, reducing processing time from hours to minutes, and cutting transaction fees. The average check-based transaction costs approximately $3.00, while automated ACH transfers cost less than $0.50 to complete, representing significant savings for businesses processing multiple payments monthly.

How much can businesses save by implementing payment automation?

Businesses typically see cost reductions of 60-85% in payment processing expenses through automation. Manual payment processing can cost $15-30 per transaction when factoring in labor, materials, and overhead costs. Automated systems reduce this to $2-5 per transaction while improving accuracy and speed. Companies processing hundreds of supplier payments monthly can save thousands of dollars annually while freeing up staff for strategic tasks.

What are bulk payments and how do they improve efficiency?

Bulk payments are financial transactions that allow businesses to send money to multiple recipients in a single action through one submission. They dramatically improve efficiency by processing multiple transactions simultaneously rather than individually. This approach is particularly beneficial for manufacturers handling payroll, retailers managing supplier payments, and platforms paying contractors, reducing administrative work and processing time significantly.

How does Airwallex's Bill Pay feature support payment automation?

Airwallex's Bill Pay feature streamlines accounts payable by automating invoice processing and payment execution. It integrates with existing accounting systems to eliminate manual data entry, provides approval workflows for better control, and supports various payment methods including ACH and wire transfers. This comprehensive solution helps businesses reduce processing costs while maintaining visibility and control over their supplier payments.

What should businesses consider when calculating ROI for payment automation?

When calculating ROI for payment automation, businesses should factor in direct cost savings from reduced transaction fees, labor cost reductions from eliminated manual processing, improved cash flow management through better payment timing, and reduced error costs from manual mistakes. Additionally, consider indirect benefits like improved supplier relationships through faster payments, enhanced security, and freed-up staff time for strategic activities that drive revenue growth.

What payment trends are shaping automation in 2025?

Key payment trends in 2025 include the migration to ISO 20022 standards for enhanced data capabilities, increased adoption of digital wallets for B2B transactions, and growing demand for real-time payment processing. The Fedwire Funds Service migration to ISO 20022 in March 2025 will enable richer payment data and improved automation capabilities. These trends are driving businesses to adopt more sophisticated payment automation solutions to stay competitive.

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Airwallex Editorial Team

Airwallex’s Editorial Team is a global collective of business finance and fintech writers based in Australia, Asia, North America, and Europe. With deep expertise spanning finance, technology, payments, startups, and SMEs, the team collaborates closely with experts, including the Airwallex Product team and industry leaders to produce this content.

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