PYMNTS Intelligence: Leveraging Real-Time Payments to Aid SMBs’ Cash Flow

The strain of economic uncertainty over the past several years has compounded the perennial issues facing small- to medium-sized businesses (SMBs), adding staffing concerns and high inflation to their growing list of worries. A survey found that half of all SMBs across the United States were considered financially unhealthy, a troubling development for the country’s economic future.

Making payments fast and easy in both sending and receiving could take a load off SMB owners and give them a head start toward financial success. This month, PYMNTS examines how real-time payments can help SMBs improve their cash flow problems and promote customer loyalty for increased overall revenue.

Real-time payments can satisfy many of SMBs’ transaction demands.

A study found that 59% of SMBs required easy and effective cross-border payments, 57% said they desired process automation and optimization and 55% demanded real-time payments processing and settlement. Leveraging real-time transaction methods not only can accomplish this last goal but also can help achieve them all by allowing SMBs to improve their cash flow and have more resources to dedicate to their other ends.

Real-time payments can make the biggest difference when it comes to one-time B2B payments of relatively low value, which account for approximately $11 billion in total volume in the U.S. Moving these payments to real-time rails can help SMBs have a more accurate understanding of their cash flow at any given time, as they do not need to initiate payments well in advance of their due date and tie up cash that could go toward value-adding initiatives.

Improving this cash flow by adopting real-time payments can provide a legion of downstream benefits, including reducing accounting teams’ workload and limiting the risk that SMBs do not have enough cash on hand for critical expenses such as payroll. For these reasons, 21% of SMBs are extremely interested in real-time payments settlement, 27% are very interested and 19% are somewhat interested.

Customers are demanding instant payment options in record numbers.

Real-time payments not only benefit the SMBs sending them to their suppliers but also promote customer loyalty by meeting the demand for more payment options. For example, 61% of millennials said they were interested in faster payment options, with customers enjoying them for ease of use and the ability to better track their financial situations.

SMBs are already exploring new payment options for customers. Peer-to-peer options such as Zelle are currently accepted by 82% of SMBs across the country, for example, and 92% of these businesses said they were happy with their experiences. Expanding this implementation to real-time transactions is a natural fit and could be a massive driver of new sales for SMBs.