Businesses angling for a competitive advantage are clamoring for instant payment options for everything from managing payroll to paying vendors. Instant payments such as digital wallets keep businesses on the cutting edge of innovation and allow them to share the speed with their customers and vendors.
“The reasons for this focus on faster payments are numerous,” Drew Edwards, CEO of Ingo Money, told PYMNTS. “From cash crunches brought on by the pandemic to their customers’ growing preference for digital experiences, businesses realize they have to offer this capability to retain and expand market share.”
Money in the Right Place at the Right Time
Enabling faster payments can augment countless use cases. Businesses leverage instant payments to make payroll, support emergency funds, pay vendors, meet customers’ demands and access those funds at any time without needing to visit branches or make phone calls.
Having money in the right place at the right time means fewer delays in payments and a host of other functions. The speed of instant disbursements over traditional transactions is one of the biggest drivers of its popularity, especially when it comes to commercial use.
With the growth of digital financial options, businesses are growing used to faster payments. Nearly 75% of microbusinesses and 60% of all other businesses said cash flow issues were their top concern in the current economy, making the implementation of faster payments a top priority to ease these issues.
A Key Driver When Selecting Banking Partners
This growing demand for faster disbursements has become a key driver in businesses’ decisions when selecting banking partners. Two-thirds of businesses surveyed said instant payments would play a key role in any future decision about choosing a banking partner, and the same number said the ability to accelerate payments would be a key motivator in switching bank partners.
Implementing the ability for faster or instant digital payments could be a crucial tactic for banks looking for a competitive edge over their counterparts that do not. That’s especially true of smaller financial institutions (FIs), which may lack many of the features and services of their larger counterparts, yet can quickly flip the switch on these services by partnering with innovative FinTechs.
“The near-universal embrace of instant, digital payments by consumers and a growing emphasis on this capability by businesses are creating an opening for a wide range of smaller financial institutions, nonbanks and others to engage on turf that was traditionally reserved for the big banks,” Edwards said.
Providing instant payments will be critical to maintaining a competitive edge in the lightning-fast digital banking environment. Businesses are more than willing to switch FIs for access to superior services, meaning banks must stay on the cutting edge or risk being left behind.