Wire Transfers First to Go When B2B Firms Adopt Real-Time Payments

When companies add real-time transactions to their B2B payments mix, wire transfers and regular ACH are the typically the first methods to get displaced.

Among the firms that receive real-time payments, the use of wire transfers is 5.9% lower than it is among firms that do not receive them, according to the September edition of “Real-Time Payments,” a PYMNTS and The Clearing House collaboration.

Read more: Real-Time Payments: How Speed is Changing the Mix of Business Payments

For firms that send real-time payments, regular automated clearing house (ACH) payments are impacted by the adoption. These firms use regular ACH 7.5% less often than those that do not send real-time payments.

Higher Expectations

Of course, other methods get pushed aside as well. Once companies enable real-time payments, they account for 14.4% of the total B2B payments they receive and 16% of the ones they make.

Why is that? Elena Whisler, The Clearing House senior vice president of client relationship management, wrote in the PYMNTS eBook “In a Word: 50 Thought Leaders Sum Up 2021” that after the accelerated shift to digital payments during the pandemic, more and more businesses are demanding enhanced, often instant, digital banking and payment options that align best with their needs.

Related: The Clearing House: 2021 Was the Year of Delta

“With a real-time payment over the RTP network, a customer receives a confirmation that the transaction is complete and the funds are available immediately,” Whisler wrote. “The expectation of instant gratification mirrors what other industries are experiencing as well, such as [same-day] shipping, instant curbside pickup, streaming entertainment and more.”

Delivering Speed, Transparency

PYMNTS’ research found that speed and transparency are among the top benefits that businesses expect from real-time payments.

About 35% of the businesses surveyed said they expect real-time payments to provide more transparency in payment processes, 31% anticipate the ability to make urgent payments, 25% expect easier payments tracking and 23% count on better cash flow.

These also build customer satisfaction and loyalty. The survey found that about 61% of businesses expect real-time payments to give them an improved competitive advantage, while 29% say the same of access to new markets and 18% say that of gaining new customers or suppliers.

Whisler wrote in the PYMNTS eBook that many small- to medium-sized businesses (SMBs) saw these benefits in action when the pandemic hit — many offices were closed and teams struggled to make and receive payments.

“For SMBs, real-time payments have helped to speed the shipment of goods from overstretched and often understocked suppliers,” Whisler wrote. “As supply chain problems extended to many other types of businesses in 2021, real-time payments have helped to ensure that shipments are sent to a business expediently.”

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