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Digital payments gain traction in agribusiness, yet hurdles remain

Ag tech experts address the gap between farmer adoption of digital payments and the numerous benefits they provide.

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Digital Payments
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The agricultural industry is experiencing a gradual shift from traditional paper checks to digital payment methods, driven by younger farmers and the appeal of improved transaction efficiency, according to a panel of grain industry experts at the Bushel Buddy Seat Conference in Fargo, North Dakota.  

Today, even in a world where Venmo payments and online banking have become the norm, many agribusinesses continue to mail paper checks. But panel moderator Erin Haspel, VP of business development for Bushel, said the 2024 State of the Farm Report indicated a growing demand for digital alternatives, revealing that less than 40% of farmers under 40 prefer paper checks. This generation recognizes that outdated methods can’t match the speed, security and access to real-time data that digital payments provide.

Meanwhile, older farmers cite decades’ long track records of success from check payments and their familiarity with accounting practices as reasons not to opt for digital payments. This lack of enthusiasm for digital transformation presents challenges for agribusinesses eager to implement post-digital-era payment solutions.  

“Generally, nobody complains about getting paid faster, securely and conditionally on time,” said Steve Valenscin, founder and CEO of GROWERS, a supplier of a tool that simplifies grower’s engagement with retailers. “The challenge is how to get people comfortable with trying a new way. Digital payments could potentially be better, but it’s still unfamiliar. The biggest hurdle farmers and ag businesses face is the cognitive load of starting to do something differently.”

Overcoming hurdles to digital adoption

James Burgum, CEO of The Arthur Companies highlighted the emotional component of farmer sentiment toward digital payments. If a grower prefers to meet with agribusiness partners in person, they may be cautious that digital payments will shift their valued partnerships into purely transactional relationships.

“Keep in mind that farming is generally a solo act,” Burgum said. “Being an entrepreneur can be lonely, so if you spend a lot of time by yourself and then have a reason to go in and have a conversation with the merchandiser or another grower while delivering a check, that’s an attractive opportunity.”

While replacing the “ceremonial” check delivery experience with a digital one may be a sensitive issue to tackle, Valenscin urged agribusinesses to advocate for digital payments by updating the criteria for valued partnerships to include enhanced digital customer experiences, like real-time access to account balance and credit information.  

The rising costs of traditional payments is a more clear-cut issue to address. Mailing checks was an inexpensive option for decades, but now, postage rates, processing fees and paper printing costs are making paper payments less attractive. The U.S. postage stamp has increased four times in the past two years, adding up quickly for businesses and growers writing numerous checks monthly.

New opportunities for ag retailers

Retail agribusinesses stand out as the potential leaders in delivering digital payment solutions, and demonstrating the value of these options to growers will help change their opinions. The panelists pointed to examples like loyalty programs and insights that enable better decision-making and marketing strategies to improve farm operations. As the industry continues to evolve, Bushel is partnering with agribusinesses to facilitate the transition to digital payments.

A new direct deposit feature for Bushel Wallet was introduced at their Buddy Seat Conference that delivers the value farmers are seeking. Accessible through Bushel’s customer portal, the feature eliminates the need for voided checks and mailed paperwork and reduces fraud risks by offering a deposit-only account as a safer alternative to standard ACH transactions.

It also offers auto-enrollment and easy fund management for farmers, while offering agribusinesses cost savings, improved digital interfaces with growers and streamlined transactions and workflows across the agricultural supply chain.

“I view this as a strong strategic advantage for retail to lean into and embrace digital payments,” Valenscin said. “Your ability to adopt that technology before your competitors do positions you statistically to serve more farmers in the way they increasingly prefer to engage.”

While challenges remain, ag tech experts anticipate more digital payments taking place in agriculture.

“The hopeful part about this challenge is that tomorrow there will be additional opportunity to serve more farmers in this way,” Valenscin said. “It’s only trending in one direction.”

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