The New Economy: Sending Payments to Vendors

The New Economy came about due to a shift in the American economic paradigm that moved from predominantly manufacturing-based industries to service-based industries. 


More than ever, business transactions transcend borders, and services reach further than ever before because of the internet and the new way in which we communicate with others. 

Sending payments to vendors can be a headache for New Economy merchants like you and businesses like yours. Not necessarily because you’re parting ways with well-earned cash — but because there are a host of ways to pay vendors, and each method comes with different perks and downfalls. 

The New Economy has been a game-changer in the world market. Over time, many of our working lives have become more flexible, and we can set our own schedules and work on our own terms more than ever before. 

Furthermore, generating income outside of a regular job has become more viable to more people. For example, there are content creators, like those who use OnlyFans and Patreon, and freelancers who use Upwork and Fiverr who generate income as a result of the New Economy. 

There are so many options you can choose from when it comes to paying your vendors. This article will help you determine what options may suit you best so you can make an informed choice. 

So, what vendor payment options do you have that we’ll explore in this article? Well, there’s:

  • Check
  • Cash
  • ACH
  • Wire
  • Zelle
  • PayPal (US)
  • SEPA (EU)
  • Crypto
  • Stored card solutions 

Let’s dive right in!


Ah, the reliable check. The humble piece of rectangular paper and an old-school way to pay vendors. But is it still useful? 

Sending a check is a process, and is more time-consuming than other methods of payment you’ll read about in this article. 

Checks take quite the journey to get from A (you) to B (the vendor). Here are the steps:

  1. You have to write checks out and sign them
  2. Mail them to your vendor
  3. Wait for your vendor to deposit the check
  4. Wait for the bank to send it off for processing
  5. Wait for the check to settle before it gets sent back to your bank
  6. Wait for your bank to confirm that you have adequate funds before it gets taken out of your account and put into your vendor's account.

However, there are some advantages of using checks to pay your vendors. Firstly, they don’t require you to pay additional fees. They’re also useful if your vendor doesn’t have electronic banking or any other means of receiving payment electronically. 

There’s also a potential risk in using checks to pay your vendors, and you should think hard before you use one. What’s the risk? Well, a check has a lot of your information on it. It will have your company’s name, address, banking information, and signature. This information can heighten your risk of becoming a victim of fraud. 

Make sure you only use checks when paying vendors you trust! 


Cash is another tried and trusted payment method. In fact, paper money has been used in the US since 1690, according to Investopedia

However, using cash—similar to checks—to pay your vendors can be time-consuming. This payment method requires additional steps in terms of documentation, as documentation via cash payments must be input manually. 

So, whenever you pay a vendor in cash, you must ensure that you have receipts that explicitly state that you paid them using it. 

Using only cash to pay your vendors can be risky because the IRS might start keeping a close eye on your activity, believing you may be engaging in illicit activities. 

Therefore, using cash too often—or paying vendors with petty cash (money used for unexpected expenses) frequently—might put you under investigation.

However, it is, of course, legal to use cash to pay your vendors. Just because the IRS is suspicious and potentially monitoring you doesn’t mean you’re doing anything wrong—but it can still be a headache. 

When you pay vendors in cash, ensure that you’ve always got receipts for all transactions and keep track of them properly.


ACH stands for “Automated Clearing House,” and it’s the biggest payment network in the US—assisting $61.9 trillion of financial transactions in 2020, according to ScaleFactor. The organization that runs ACH is called “Nacha.” 

There are two ways to make payments through ACH: 1) direct deposits and 2) direct payments. When using ACH, you pay your vendors through direct payments.

ACH transfers are electronic, and these transfers move funds between banks. Transactions take three business days to go through. However, there are cut-off times each day which means you might have to wait even longer. 

According to the Nacha website, if you submit a payment request before 10:30 AM ET, the settlement will start to process at 1 PM the same day. You have a cutoff point of 2:45 PM ET in the afternoon, with the settlement going through at 5 PM. If you submit any time later than the afternoon cutoff, you’ll have to wait until the next day for settlement. 

The only outliers to same-day processing are international transactions and transactions that are over $25,000. So, if your vendor is international—or you need to pay a large sum of money—make sure you take this into consideration. 

Another con of using ACH to pay your vendors is that the median cost for payment processing is $0.29 each time you make a transaction. Furthermore, if you try to pay using this method but you have insufficient funds, your bank will cancel the transfer, and they may even fine you for it. 

Another problem with this payment method is that banks tend to have daily and monthly limits on these transfers, so it’s essential to stay on top and know these limits, ensuring you’re not going to exceed them when it’s time to pay your vendors. Lastly, it’s quite likely that your bank will not allow you to make an ACH transfer internationally.

On the other hand, ACH transfers are often free if you’re paying a vendor in the US, and using ACH for recurring payments is a good option because it’s simple to do.

Whether you use ACH to pay your vendors is up to you. There are plenty of reasons to use it, but you might want to consider using another method if your vendor isn’t domestic. 


Although wire transfers are similar to ACH transfers, there are a few key differences. Let’s explore some of these:

  1. ACH is US only, but wire transfers can be sent internationally.
  2. Wire transfers are faster, and they often process the same day—but they still tend to take longer when used internationally. 
  3. The fees associated with wire transfers are significantly higher. Although it’s always dependent on the bank, fees typically range from $25 for transfers within the US to $45 for international transfers. Therefore, if you opt to use a wire transfer, make sure you factor in the bank’s fee so you’re not surprised.

Otherwise, the process of using a wire transfer is like using ACH. 


Zelle is an app you can use to send money directly between bank accounts, and it allows you to move funds in minutes rather than days. It was founded in 2017 as an instant payment service and was developed by over 30 US banks. 

One advantage of Zelle is that most banking apps have it built-in—including Chase, Wells Fargo, Citi, and Bank of America. You and your vendors can likely use this function without downloading an additional app.

Zelle also allows you to send money from your bank by using your phone as long as you, your business, and your vendor have signed up for it—and you each have an eligible US phone number or email account.

Another benefit of Zelle is that it doesn’t charge you to transfer money, so you don’t have to worry about calculating percentages. However, you can only transfer a certain amount of money (which varies by bank) each day and month.

Zelle is a safer method than using cash or checks. Your money is insured, and it never goes through a third party. Because funds get sent so quickly with Zelle, you must do your due diligence—always double-check that you’re sending money to the right person as, once you make the transaction, you won’t be able to cancel it. 

Unlike a service like Paypal—which we’ll explore shortly—Zelle doesn’t have many safety precautions. For example, if you are charged for something you never received, Zelle won’t reimburse you. If you are scammed, you may never see your funds again.

Once you go to pay your vendor with this method, Zelle will automatically alert the vendor via email or text message that there’s a payment ready for them to accept. 

Only consider using Zelle if your vendor has already done the work, if the good has already been received, or if you’re paying a vendor you know and trust. This is essential to mitigate the risk of being scammed. 

PayPal (US)

PayPal was originally intended for personal use money transactions, as opposed to business use. 

Although PayPal does have a business function, it still comes with large fees, especially if you’re trying to pay your vendors with a considerable sum of money. Some of the fees are fixed, and others are done by percentage—it all depends on how you’ve set up your account and payment. 

Furthermore, if you need to pay a vendor in another country, PayPal has a hefty foreign exchange rate.

You’re also not guaranteed protection when you pay a vendor through PayPal. PayPal has quite robust terms of use, and they can suspend your account and keep funds frozen for significant periods of time, so exercise caution when using this method.

When you pay a vendor through PayPal, you can either send the payment directly from your PayPal account or schedule it to go through PayPal via your bank account. 


SEPA stands for the “Single Euro Payments Area,” which the EU created to handle transactions. It allows for cashless payments to be made between different countries that use the euro as currency, and businesses can pay vendors with it.

SEPA—regulated by the European Payment Council (EPC)—allows all 27 EU members and nine other European countries to use the euro regularly to make payments.  

The benefit of SEPA is that New Economy merchants can pay vendors across countries, make payments easily without using cash, and only pay the same amount they would need to pay for domestic payments.

With SEPA, you can pay international European vendors directly into their debit accounts via electronic transfer. And because it creates a competitive and single market for payment services, it keeps transaction costs low. 

SEPA allows you to pay your vendors via direct debit, and you can do a single transfer that goes to your vendors straight away as a one-off or a recurring payment. You can go through either SEPA Core Direct Debit or SEPA B2B Direct Debit, and each has different deductions. 


If you and your vendor have a crypto wallet, you can issue cryptocurrency (crypto) to your vendors’ wallets through an exchange like coinbase

Your crypto wallet is securely stored, and there are a variety of wallets that you can have.

The wallets you decide to use are dependent on the purpose of your crypto and the level of safety you want from your crypto. 

There are a few options you can choose from when setting up a crypto wallet. These include hosted wallets, non-custodial wallets, and hardware wallets

Think of it like this: you have various ways to store your money (bank, safe, under the bed, hidden in a box in the woods), and crypto is no different. The simplest option is a hosted wallet, but there are plenty that may suit you best when paying vendors. 

Stored card solutions

Stored card solutions are most useful for countries that do not have a well-established banking system. They are especially useful for international payments to these countries. 

Paying vendors via stored card solutions is especially useful for many South and Central American and Eastern European countries. Furthermore, at the time of writing, countries in Africa are in the process of getting support from stored card solutions.

Stored value cards are the same as prepaid cards, and they function similarly to debit cards. However, they are funded differently. Because they are used mostly in countries with good banking access, these cards are funded in advance and not interlinked with your bank account. 

The pros of these cards are that they are convenient, secure, and flexible and many merchants use them to pay their vendors. 

Stored value cards constitute a relatively small chunk of worldwide electronic payments, but their impact is far from minimal.

There are two different major categories when it comes to stored value cards:

  1. Open loop. These cards are more similar to credit and debit cards and are used in conjunction with many major card networks (Mastercard and Visa, for example). Some card brands that even issue them themselves, including American Express and Discover. These cards can be used in any location or online from any merchant that accepts credit or debit cards. 
  2. Closed loop. These cards can only be used at a single merchant or store—like gift cards, for example. 

Stored value cards are especially helpful to those in countries that do not have credit or debit cards. These cards are becoming especially important as eCommerce grows even further. An example of a company that uses stored card solutions is MassPay.

But how can you use stored value cards to pay vendors?

  • Stored cards must be provided to each vendor who wishes to receive payment via this method.
  • The card is then funded via an exchange, and the vendor will have access to use those funds as a Visa or MasterCard (if supported) or to withdraw funds from an ATM (also if supported).
  • We recommend that merchants partner with a network that can issue and fund cards on their behalf, many times in a branded manner.

How L3 can help

L3 offers a service that allows merchants/business owners to send payments to vendors, consultants, and even clients.

We have a network that offers solutions for merchants wanting to pay vendors using cash, bank/ACH, prepaid cards, and through their Mobile Wallets. We support worldwide payments to help your business grow internationally. 

In short, we:

  • Facilitate 100,000 bank beaches
  • Can deliver payments to your vendors of up to $500,000
  • Have 10 prepaid card currencies
  • Support spend-back
  • Support mobile wallets
  • Operate bill payments in 21 countries


If you have any questions about our services, feel free to contact one of our experts today!


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