Faster Payments: What SMBs Need to Know
Faster payments are no longer a future concept—they are here, and they’re quickly becoming an expectation. For small and midsize businesses (SMBs), tools like FedNow, same‑day ACH, the RTP network (and eventually stablecoins) are less about flashy technology and more about improving cash flow, reducing costs, and keeping customers and vendors happy.
What “faster payments” actually are
There are four main categories most SMBs will encounter:
- FedNow and RTP (Real-Time Payments) are instant payment rails offered by the Federal Reserve and The Clearing House, respectively.. They move money between bank accounts in seconds, 24/7/365, with final, irrevocable settlement once a payment is sent.
- Same‑day ACH is an enhanced version of traditional ACH that adds extra settlement windows. Instead of waiting one to three business days, certain ACH credits and debits can post on the same business day.
- Stablecoins are still emerging in mainstream business payments but are increasingly used to move value globally in minutes, often with lower cross‑border fees and around‑the‑clock availability. Current use within the US is limited.
All of these options aim to shorten the time between “I sent the payment” and “the money is usable in my account.”
How faster payments help SMBs
The biggest benefit is cash flow. Instant rails like FedNow and RTP can cut settlement times from days to seconds. That means a business gets paid the same day it delivers goods or services instead of waiting for checks to clear or card deposits to batch out. Better cash flow translates into fewer short‑term loans, less stress around payroll, and more confidence when paying vendors.
Cost is another key angle. Real‑time payments typically cost a small, flat fee per transaction—often less than card interchange or wire transfers. Same‑day ACH usually carries a slightly higher fee than standard ACH, but it is still cheaper than most card payments. Stablecoins introduce the possibility of significantly lower fees for cross‑border transfers and can bypass some of the frictions of traditional correspondent banking.
Faster payments also improve relationships. Paying vendors quickly can unlock better terms or preferred treatment. Customers benefit from instant refunds or payouts, which can become a differentiator for service‑oriented SMBs. For businesses with international or digitally savvy customers, accepting stablecoins or similar digital assets can open new markets where cards and local bank rails are limited.
How hard is it to start accepting them?
For most SMBs, the technical heavy lifting happens at the bank or payment platform level. The business primarily needs to decide where faster payments fit in its workflows.
- FedNow and RTP: SMBs usually access these through their existing bank or a payment/treasury platform that has already connected to the rails. Enabling them often involves updating online banking settings, adding an “instant pay” option on invoices or portals, and training staff on how to route and reconcile these transactions.
- Same‑day ACH: If a business already uses ACH, moving to same‑day is relatively simple. It generally requires opting into same‑day processing, accepting slightly higher ACH fees, and adjusting cut‑off times to ensure funds are in the account before submission windows.
- Stablecoins: These require more effort and policy decisions. There is minimal customer demand; the market is emerging. At least one of the payments networks has just announced instant settlement using stablecoins.
- In practice, same‑day ACH is the lightest lift, FedNow and RTP are a moderate step via existing providers, and stablecoins may become more broadly useful, but currently make sense in limited situations.
How SMBs should decide
To decide whether to accept faster payments—and which ones—SMBs should focus on a few practical questions:
- Do we have a cash‑flow problem?
If delayed deposits or mailed checks ever force you to tap a line of credit, delay payroll, or pay late fees, faster payments can quickly pay for themselves. - What do our customers and vendors expect?
Are customers asking for instant payouts or refunds? Do key suppliers offer better pricing or priority if you pay faster? If so, enabling instant or same‑day options can directly support those relationships. - Do the economics make sense?
Compare the per‑transaction and platform fees for FedNow, RTP, same‑day ACH, (and in the future, stablecoin services) to what you pay today for cards, wires, and paper checks. Include soft costs like time spent chasing payments and dealing with exceptions. - Are we operationally ready?
Faster payments change timing. Someone must reconcile 24/7 incoming payments (or at least more frequent batches), update cut‑off times and payment terms, and monitor for fraud in real time—especially because many instant payments are irrevocable. - What is our risk and compliance appetite?
Instant payments reduce credit and settlement risk but increase the impact of a mistaken or fraudulent payment, since it cannot be easily reversed. Stablecoins introduce additional questions around regulation, custody, and FX management.
A practical roadmap for many SMBs is to start where the benefit is clear and the friction is low: upgrade existing ACH to include same‑day where it matters most (payroll, urgent vendor payments), and turn on at least one instant rail like FedNow or RTP through your current bank or processor for high‑value invoices and payouts. Once internal processes for real‑time money movement are in place, you can evaluate niche use cases—such as cross‑border stablecoin payments—for additional upside.
If you’d like more information about this topic, please contact David True at dtrue@paygility.com or Dean Sheaffer at dsheaffer64@gmail.com