Digital payments have taken over checks as businesses seek to make their transactions more secure and efficient. Paymode is a digital payments network that allows businesses to make and receive electronic payments, and is well-known in the industry for its security, speed, and benefits it provides to both payers and their vendors.  

The Paymode network has been serving businesses since the early 2000s. Paymode has grown from 80,000 member businesses in 2009 to over 600,000, and securely processes $500 billion in payment spend each year.

With business payments networks becoming the most secure way for businesses to exchange payments, and only 37% of organizations using a network today per Ardent Partners, there’s a significant opportunity for businesses to safeguard their critical payments. Paymode is one of the networks at the forefront of this shift.

In this article, we’ll cover:

• What a business payments network is
• What Paymode does
• What benefits the network offers

What Is a Business Payments Network?

Sometimes called B2B payments networks, the structure, size, and payment methods offered by networks vary. Essentially, every network represents a way for businesses to exchange payments. These are considered  “closed” networks, as they’re accessible only to member businesses. Two types of businesses traditionally use payment networks:

• Payers – payers use business payments networks to issue payments more efficiently and securely to the vendors and suppliers they rely on to help run their business
• Vendors – vendors are typically asked to enroll in the payments network by their payers. By joining, they often receive payments faster and enjoy benefits for their own accounts receivable processes.

Those are the improvements most businesses are pursuing when they choose to route business payments through a network. These networkstypically upend programs including in-house check payments, bank-based ACH payments, and so on. Because so much of the onboarding process and validation for vendors is handled by the company running the network, and because networks enable automation levels traditional programs eschew, the benefits are increasingly recognized by businesses tiring of legacy payment programs.

Closed networks like Paymode offer other enhancements, chief among them fraud prevention. If a payer or vendor wants to join a protected network, they must be authenticated and have their critical data validated. All account changes and logins are then monitored to ensure bad actors aren’t trying to gain access to payments and data,   vendor safely. Networks worth their salt also make payer program migration easy so that businesses do not have lengthy and costly implementations associated with moving away from legacy systems.  

Paymode is one of these business payments networks, one that also connects to Bottomline’s payments automation solution. The network has grown over the years with a focus on security, efficiency, vendor enrollment and ROI, and generating cash back for payers to further incentivize businesses to join. The ability to deliver those benefits is crucial for any business payments network to survive and thrive, and Paymode has done so by virtue of a network effect that has made it easier and easier to connect more payers and vendors and scale efficiency and security benefits as adoption of the network has grown. We’ll discuss that further in this article.

For more information about B2B payments networks, explore our in-depth article.

Who Uses Paymode?

Over 600,000 businesses use Paymode to either make or receive payments. In addition, many of the largest banks in the US and several major financial technology companies currently use Paymode to reach their customers and their vendors, either as a standalone offering or as part of an integrated set of invoice-to-pay solutions.

Payers

Businesses making Premium ACH, virtual card, and other payments through Paymode are referred to as payers. These organizations typically migrate their payment programs from checks, existing bank or fintech programs, or in-house ACH methods to a more integrated approach with Paymode.

The Paymode team works with payers to enroll as many of their vendors as possible in secure virtual card or ACH payments, taking the burden of onboarding off the payer’s accounts payable (AP) team. Once vendors are securely onboarded, the payer can begin automating their vendor payments, which generates efficiencies for the AP team and earns the business cash back on all eligible transactions, in the form of rebates.

Vendors

Businesses receiving payments through the network are referred to as vendors or suppliers. These businesses join the network at the request of their payers, with the Paymode team reaching out to enroll these companies.

In the case of Paymode virtual cards, vendors pay the standard interchange fees assessed for card payments. Vendors pay a per-transaction fee on Premium ACH payments, which is less than a virtual card payment. When vendors agree to receive either of these payment types through Paymode, not only are they signing up for more efficient, secure payments, but they’re also gaining access to a host of accounts receivable tools including:

• automated cash application capabilities
• online payment status tracking
• scheduled reports and detailed remittance data

It’s important to note that a vendor must be authenticated and vetted against more than 300 data points before gaining access to the Paymode network. This protects both payers and vendors who are part of the network.

Banks

Many large banks also rely on Paymode. Some offer Paymode – and its payment automation capabilities – as an enhancement for their existing end-to-end AP automation solutions. Others tap into the network only so that their business customers/payers can capitalize on an additional payment type that is widely accepted by vendors and earns the payer cash-back rebates that most forms of ACH payments don’t. Banks turn to Paymode because of the number of businesses already using the solution, the level of fraud prevention technology and expertise, and the number of successful existing partnerships that have demonstrated the value of the network.

Partners

These businesses are often financial technology companies seeking to offer customers new capabilities, such as Premium ACH payments or enhancements for vendors. These partners also may offer their own expertise and solutions for Paymode, strengthening the network’s value for existing and future payers and vendors alike. They typically embed Paymode into their offering, the first to do so was Coupa in 2024. Paymode is an integral part of their CoupaPay offering.

Enterprise Resource Planning Software Providers

Companies providing ERPs are extremely critical to the survival and growth of the businesses they serve, given that they provide a centralized way to manage business operations, data, and often invoices and payments. Paymode provides both fully embedded solutions for these ERPs and ways to seamlessly send data back and forth between the network and the ERP system to boost efficiency.

Why Do Businesses Use Paymode?

There are several reasons why businesses choose the Paymode network to make, receive, or enable payments. In our experience, vendors and payers join Paymode to boost their security and efficiency, while partners may appreciate the ability for their customers to generate more rebates.

While those reasons will vary in importance depending on the company, here are the benefits customers tell us they prize in order of what we hear most.

Security

This is the top-of-mind benefit for most businesses joining the network. Payment fraud is growing rapidly in both complexity and frequency, with 79% of businesses reporting experiencing at least one attempt in 2024 per Ardent Partners. Protecting payments, bank account information, and other critical financial data takes on outsized importance when the reputational and monetary costs of a fraud incident can reach into the six figures.

Paymode processes over $500 billion in business payments annually with zero fraud on the network, an achievement that requires heavy investment in technology, expertise, and monitoring to keep every payer and vendor safe. The security begins with an exhaustive authentication process involving over 300 data points to ensure every business joining the network is legitimate. Once a business has joined the network, they’re backed by live monitoring to ensure logins and account change requests are not being attempted by bad actors, and extends to protecting the payments themselves from being intercepted or misdirected.

Vendors appreciate that they are protected even if they fall victim to Business Email Compromise and other account takeovers, while payers enjoy the peace of mind associated with more secure payment types and not needing to hold vendor bank account data in their own systems.

As the accounts payable manager at one enterprise healthcare company told us, “we chose Bottomline because Paymode verifies and validates the banking information of our vendors. We no longer are responsible for maintaining vendor banking details.”

Efficiency

The size of the network makes it easy for payers and vendors to connect and exchange payments; we typically see about 50% of a given payer’s suppliers on the network as soon as they sign up with Paymode. The more payments made and received, the less time both sides spend on processing, reporting, and reconciliation, leading to much greater efficiency.

Payers automate large swathes of their existing processes, from helping vendors choose a payment type to approving and issuing the payment itself. Vendors, meanwhile, enjoy much faster cash application. For banks and partners, the gains are focused on not needing to build a network like Paymode from the ground up, which would take massive expense, expertise, and time.

For customers like Kirstie Evans, a controller at The Merchants Company, that means “processing payments is so much faster.” Vendors like Prime Therapeutics, say “our efficiency has greatly improved using Paymode with zero mistakes made processing payments to client accounts on our end,” per bookkeeper Denise Roberts.

Vendor Enrollment and Value

Payers value Paymode’s ability to enroll their vendors without heavy involvement from their team, a prize given the time and cost associated with doing so. Vendors, however, would not enroll without a payer’s endorsement and compelling reasons to do so, and that is a major area of focus for Paymode.

As Northside Services of Faribault CEO Lance Hullett told us, “receiving payments using Paymode is much better than waiting for a paper check.” That reality is at the heart of why vendors do enroll in the network. They realize improved payment speed with electronic payment types, receive robust remittance information, automate cash application, and gain access to enhanced reporting that arrives in their inbox on a scheduled cadence. Vendors are looking for a reason to abandon checks, with all the speed and security concerns inherent with that payment type, but need the genuine value Paymode offers to make that switch.

ERP Connections

This benefit is chiefly for payers who want to be able to execute payments to vendors and manage their processes without needing to access separate systems. Networks that do not have the ability to work with any ERP, as Paymode does, can frustrate customers by not being able to easily send payment and other financial data seamlessly between their systems and the customer’s ERP.

As Mayer Electric Supply Company Accounts Payable Director Greg Allison told us, his company chose Paymode “because their solution directly integrates with our ERP.” There are concrete efficiency, security, and employee satisfaction benefits associated with that level of integration when AP teams do not have to spend considerable time and energy bouncing between systems.

Cash Back on Business Payments

Finally, both payers and partners can unlock enhanced revenue opportunities through two rebate-generating payment types available with Paymode: Premium ACH and virtual card.  Unlike standard ACH payments, Paymode’s proprietary Premium ACH delivers cash-back rebates to both payer and partner. Virtual cards offer rebates similar to regular credit cards. When combined together, total rebate earnings can increase.  

In fact, 80% of payers we surveyed realized at least a 50% increase in the cash back they saw with their previous payments programs. Depending on how many vendors are paid through Paymode, that can be a game-changing amount of money. Some payers celebrate their staff with a large holiday party, some invest in their customer experience with new apps, others offset the cost of their ERP, all of which is funded by their Paymode rebates.

B2B payments networks continue to grow in both importance and profile as businesses seek more secure, efficient ways to both make and receive payments.

Paymode has grown against this backdrop by focusing on ensuring every payer, vendor, bank, and partner using the solution realizes the financial, time savings, and fraud prevention gains that should come with using a network.