Breaking Up Is Hard to Do:
Small Businesses’ Love Affair
with Checks
PRESENTED BY
Connie Theien, Federal Reserve Financial Services
Tommi Homuth, Grayson College Small Business
Development Center
BC Krishna, MineralTree
Megan Minich, Silicon Valley Bank
Shaundell Newsome, Sumnu Marketing

Disclaimer
The opinions expressed are those of the
individual presenters & not those of the
Federal Reserve System, any Federal
Reserve Bank, or the companies
represented.
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Panelists
• Connie Theien, Vice President, Federal Reserve Financial Services (Moderator). Connie is responsible for coordinating
engagement with payment industry stakeholders to advance the Fed’s strategic direction for payments system
improvement. Prior to establishing the industry relations function in 2013, she oversaw the marketing and
communications function for first the Minneapolis Fed and then nationally for Federal Reserve Financial Services. In
addition to her Fed experience, her career has included stints in agency, nonprofit and consulting environments. Theien
holds an M.B.A. from the University of Minnesota’s Carlson School of Management.
• Tommi Sue Homuth, Jobs Act Coordinator, Grayson College SBDC Center. The Small Business Development Center is a
nonprofit professional management counseling service funded by colleges & universities across the country & the U.S.
Small Business Administration. The center provides free counseling to small businesses, including help with
accounting, financial analysis, management, finding financing, marketing, & exporting.
• BC Krishna, President & CEO, MineralTree, Inc. MineralTree provides Business Payments solutions — making it simpler
and safer for businesses to make & manage payments. When using MineralTree for AP, businesses save time, simplify
approvals & payments, while ensuring that payments are safeguarded from online fraud.
• Megan Minich, Head of Online Channels, Silicon Valley Bank (SVB). Silicon Valley Bank is a commercial bank serving
companies in the technology, life science, venture capital, private equity, & premium wine industries. SVB provides a
suite of financing solutions, treasury management, corporate investment, & international banking services to its clients
worldwide through 27 U.S. offices & operations in China, India, Israel, & the U.K. Founded in 1983 & headquartered in
Santa Clara, CA, SVB is a member of global financial services firm SVB Financial Group (Nasdaq: SIVB), with SVB
Analytics, SVB Capital & SVB Private Bank.
• Shaundell Newsome, Owner, Sumnu Marketing. Sumnu Marketing was established as a re-brand of Newsome
Marketing Enterprises in 2011. In addition to leading Sumnu, Shaundell is a regular advisor to the White House on
small business matters, an instructor for SBDCs & a member of the Urban Chamber of Commerce Board of Directors &
the Las Vegas Metro Chamber’s Small Business Council.
© 2014 Federal Reserve System and BAI 3
Materials are not to be used without consent.

Session Outcomes
1. Better understand the value to small biz of
electronic alternatives to checks & cash
2. Discuss pain points for small biz seeking to
adopt more e-payments
3. Discuss how financial institutions can work
more effectively with small biz to implement
new payment strategies
4. Know where to locate more resources on
payments
© 2014 Federal Reserve System and BAI 4
Materials are not to be used without consent.

Businesses Make Nearly 2/3 of All
Outgoing Payments via Check
Source: 2013 Phoenix-Hecht Treasury Management Monitor © 2014 Federal Reserve System and BAI 5
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Small Biz Rely on Checks the Most
• Small biz write about 5 – 6 billion checks per year at a cost of
between $7.5 to $10 billion – writing checks isn’t cheap!
• Many small & medium-sized biz make almost all of their payments
by paper check – in an electronic age, that’s a lot of paper! Why?
 Checks meet small biz needs—i.e., easy to use, acceptance is
nearly ubiquitous, service providers are plentiful, electronic
payments are intimidating
 Finding electronic payment alternatives is not a priority to small
biz; too busy managing the core business
 Effective alternatives are hard to find for small biz
Source: Market Sphere – Helping Banks Understand & Seize the Opportunity in Small & Medium Business Payments, MineralTree White Paper, 2013.
© 2014 Federal Reserve System and BAI 6
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New AFP Survey Results on Biz
Payments
• Top benefits AFP members cite from increased use of
electronic payments. Do these matter to small biz?
Cost savings
Improved cash forecasting
Fraud control
More efficient reconciliation
• Top barriers AFP members cite to adopt electronic payments:
Hard to convince customers to pay electronically
Hard to convince suppliers to accept electronic payments
Shortage of IT resources for implementation
Lack of standard format for remittance information
Lack of integration between e-payment & accounting systems
Source: JPMorgan, “2013 AFP Electronic Payments Survey,” 2013
© 2014 Federal Reserve System and BAI 7
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Hurdles for Small Biz Using ACH
1. Need to connect with the right person—i.e., specialized,
corporate-focused “treasury” salesperson at bank
2. Need to be prepared to answer unfamiliar questions—
e.g., “Are you planning to issue ACH credits &/or ACH
debits?”
3. Risk underwriting can be tedious—e.g., complex forms
to fill out, sometimes seems more than necessary
4. Hard to understand & rationalize monthly costs—e.g.,
maintenance: $40; file transmission: $5; per ACH item:
$0.10; plus more fees for report services
© 2014 Federal Reserve System and BAI 8
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Hurdles for Small Biz Moving to Cards
• Many small biz are looking for a standard
payment process used for all payments;
implementing card infrastructure can be high
cost
• Card payments do not necessarily include all
the remittance data small biz need
• Card information is not disclosed to the
payee; biz concerned about security
© 2014 Federal Reserve System and BAI 9
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Which Small Biz Tend to Accept
Electronic Payments?
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Appendix
© 2014 Federal Reserve System and BAI 13
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Resources
• National Automated Clearinghouse Association:
www.nacha.org
• Association for Financial Professionals:
www.afponline.org
• Small Business Administration: www.sba.gov
• Association for Small Business Development
Centers: www.asbdc-us.org
• The Institute of Financial Operations:
www.financialops.org
• Card Payments: www.visa.com,
www.mastercard.com, www.napcp.org
© 2014 Federal Reserve System and BAI 14
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Contact Information
Connie Theien, Federal Reserve Financial Services
Connie.theien@chi.frb.org
Tommi Homuth, Grayson College Small Business Development
Center
homutht@grayson.edu
BC Krishna, MineralTree, Inc.
bc@mineraltree.com
Megan Minich, Silicon Valley Bank
mminich@svb.com
Shaundell Newsome, Sumnu Marketing
shaundell@sumnumarketing.com
© 2014 Federal Reserve System and BAI 15
Materials are not to be used without consent.