As community banks and credit unions work to attract and retain small business clients, they are challenged to provide the full breadth of payment options these clients demand.
According to research from Datos Insights, 79% of small businesses want their primary financial institution to offer more payment options, as many institutions are not keeping pace with innovation in the payment space. Even more alarming, at least one-third of these businesses would switch or go to a new financial institution to get real-time payment options and better payment automation tools.
Small businesses increasingly expect more from their financial institutions, and real-time payments are helping to meet those evolving demands.
Meet Small Business Demands for Faster Payment Options
Real-time payment options such as FedNow® and RTP® are among the most in-demand capabilities for small businesses, as more than 80% of small businesses rank payment speed as an important requirement, according to Datos Insights.
This shift in expectations is already becoming clear, with more than 70% of small business decision-makers saying real-time payments are either “important” or “very important” when making or receiving payments. As demand for faster access to funds continues to rise, financial institutions that offer real-time payment capabilities can strengthen relationships with business clients while supporting their evolving operational needs.
The Benefits Small Businesses Expect From Real-Time Payments
The benefits of real-time payments are already resonating with small businesses. According to Datos Insights, the top advantages businesses are looking forward to are more efficient money management, greater control over when payments are received, and more reliable cash flow forecasting. Businesses also cite higher recipient satisfaction and improved perceived security as important outcomes, highlighting the broader operational and customer experience value real-time payments can deliver.
Beyond faster access to funds, real-time payments also support more efficient and transparent communication between payers and recipients. more quickly resolve reconciliation issues and maintain clearer payment records tied directly to the transaction itself. Because these payment-specific communications remain attached to the payment record, users can easily reference important details whenever they are needed.
When financial institutions don’t provide real-time payment options, small businesses are increasingly turning to independent fintechs, such as PayPal or Venmo, to make payments in real-time or near real-time. However, among businesses who are already leveraging a fintech for faster payments, 83% admit that if their primary financial institution offered the same capabilities, they would instead look to that primary institution for these capabilities, according to Datos Insights.
Providing small businesses with the payment options they increasingly expect — including real-time payments — is becoming essential for financial institutions looking to strengthen client relationships. To learn more about evolving small business payment expectations, explore Datos Insights’ report, Enhancing the Small-Business Payments Experience.
Read the report
Leslie Chaffer, Vice President of Product Management
Leslie Chaffer is Vice President of Product Management at CSI, focused on building market-leading capabilities for small businesses that are easy to understand and simple to use. She has been an Accredited ACH Professional (AAP) for more than 20 years and uses that expertise to drive excellence in the products and services she manages. Leslie holds a Master’s degree from Tulane University and has more than 24 years’ experience in digital banking and financial services.