Corporates Pressure Banks to Accelerate Instant Payments Adoption

Tariffs are here, inflation is sticky, and supply chains and vendor relationships are in flux.

For enterprises, it’s critical to have as much certainty as possible when it comes to cash flow. It’s no longer enough to wait three days for transactions to settle. The paper check, which has been a staple of roughly 40% of B2B payments, is certainly no panacea and can present security risks.

Real-time payments have been around for years, although the uptake has been gradual in the United States. The Clearing House debuted its RTP® network in 2017. The FedNow® Service, the real-time offering from the U.S. central bank, went live in 2023.

Although we’re far from critical mass, several hundred banks have signed on to each of those rails, and there have been increases in transaction limits. By way of example, TCH late last increased the transaction limit to $10 million from the previous $1 million. The FedNow limit for sending instant payments is being raised to $1 million from $500,000. Interoperability is not possible at the moment, but that may change over time.

The PYMNTS Intelligence report “Pivotal Moment: Banks’ Real-Time Payments Opportunity in 2025,” a Galileo collaboration, found that banks know they must enable faster payments. A key prime mover comes from their corporate clients, and 70% and 80% of all financial institutions are expected to be able to receive instant payments by 2028.

Although there is an initial “either/or” component as more than two-thirds of U.S. companies see themselves joining either the RTP network or the FedNow Service in the next two years, there’s a groundswell on the part of banks to be ubiquitous. The report found that 75% of mid-tier banks plan to adopt both major U.S. real-time rails.

Pressure From Business Clients

Nearly all banks — 99% — report pressure to adopt instant payments coming from their client base, spanning retail banking customers and commercial banking customers. The 64% of banks serving corporates said they are getting a nudge from their enterprise clients, outpacing the over half that said the pressure is coming from the retail banking side of operations.

For enterprises, and from a B2B standpoint, these payments streamline operations, reduce processing times and mitigate delayed payment risks — all attributes that improve cash flow. Just-in-time supplier payments have a positive impact up and down supply chains because the buyer has time to hold onto cash as long as possible, while still paying within the terms of the agreement struck with suppliers.

The supplier benefits from cash that is received with certainty, which then means they can pay their own suppliers on time and keep operations humming. For enterprises embracing real-time payments within their own operations (and through their banking partners) instant payroll can help cement worker loyalty as employees appreciate cash flow visibility in their own lives.

Not offering real-time payments to corporate clients gives them a powerful incentive to switch to banking competitors that do, so it’s a sure bet that no bank will want to be the odd one out. There are near-term plans to improve and offer a broader range of corporate real-time payment options.

Of the banks that were surveyed in the Galileo report, 31% of them will seek to offer embedded real-time payment options to their client firms. The success enjoyed by financial institutions that have already implemented instant payments can pave the way for further adoption, as 93% of financial institutions that enable instant payments see a positive impact on customer retention.