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Insights and Expertise

Faster payments What impact do faster payments have on SMBs?

Faster payments are more than just quicker transactions;
use cases and the they represent a fundamental shift in how SMBs manage
their finances and interact with customers. Here's how
impact on SMBs faster payments affect operations across key business
areas:

• Improving cash flow—Businesses depend on
cash flow to run operations. Therefore, when they
experience hiccups, most companies have to apply
for business loans, which generally have a repayment
term of up to 25 years. This can significantly impact
cash flow.
Faster payments eliminate the delay of waiting months
to receive payments, providing SMBs with immediate
By Walter Akolo access to income. This reduces their dependence on
iCG Pay expensive short-term loans or lines of credit that carry
high interest rates. With faster payments, businesses
he speed of financial transactions makes all the receive funds instantly, allowing them to pay
difference for small and midsize businesses employees, purchase materials for the next project,
(SMBs). As technology continues to evolve, so and avoid costly financing options. Additionally, they
T do the methods by which businesses send and provide real-time visibility into cash flow, enabling
receive payments. One example is the significant traction SMBs to make informed financial decisions.
occurring as SMBs and banks increase their adoption of
faster payments. • Enhancing customer satisfaction—Faster payments
create a seamless checkout experience, eliminating
Faster payments refer to electronic payment solutions frustration and speeding up the buying process.
facilitating near-instantaneous funds transfers between For instance, customers can pay much faster from
parties. Unlike traditional transfers, which can take anywhere if a payment process is integrated with
days, faster payments typically process within minutes, faster payment systems like ACH transfers, virtual
providing swift access to funds. These systems adopted terminals, credit card payments or hosted payment
by banks, financial institutions and payment service portals. Happy customers return and recommend the
providers leverage technologies and real-time processing business, fostering brand loyalty and boosting sales.
capabilities to expedite transactions, offering a seamless,
efficient alternative. • Boosting operational efficiency— Businesses that
adopt faster payments eliminate manual processes
Faster payments use cases fundamentally change how like cashing late payments, tracking paper checks and
SMBs receive and disburse money. A recent study by Visa reconciling invoices. Just imagine the wasted time and
showed that 73 percent of small business owners relied on resources an SMB spends manually tracking overdue
new forms of digital payments for growth. invoices. Faster payment systems automate tasks and
free up valuable staff time for more strategic activities
Traditionally, SMBs struggle with slow customer like customer outreach or product development. This
payments and delays in receiving funds from suppliers. translates to improved customer service, increased
Snail mail and delays of ACH deposits hitting accounts productivity and a more competitive business.
affect their cash flow. This cash flow lag creates a Faster payment use cases for SMBs
significant financial burden. This uncertainty challenges
financial planning and budgeting, hindering growth and Faster payments can streamline SMB supplier transactions.
limiting opportunities. With real-time transactions, faster Businesses that use suppliers can access transaction cash
payments offer a lifeline for SMBs. within 72 hours thanks to faster payments. Therefore,
they don't have to wait weeks for invoices to clear, which
With faster access to funds, businesses can improve fosters stronger business relationships. In addition, they
their cash flow management and payroll processing, can achieve efficiency and boost security with ACH
streamline operations, reduce administrative overhead processing, which takes one to two days or the same day,
and ultimately thrive in the competitive market. Payment depending on the specific business.
processors, who are at the forefront of offering safe,
efficient and accessible faster payments, know first-hand Faster payments can also enhance payroll processing.
the intricacies of faster payments and its various use cases Numerous small businesses handle their payroll needs in-
affecting SMBs. house. Therefore, any payroll delays can cause significant

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