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U.S. Bank On Helping Businesses Pick Faster Payment Options

DATE POSTED:October 29, 2020

Paper checks have long been a mainstay of corporate payments, with 42 percent of companies reportedly using checks to pay vendors in 2019.

It is no secret that they are a slow way to deliver funds, however. Suppliers often struggle with the cash flow strains caused by sluggish B2B transactions, and the global economic downturn has made companies more concerned that such revenue interruptions could impede their abilities to stay in operation. Vendors are not the only ones feeling the pain, either. Consumers are also working to handle new budget strains and seeking swifter access to their earnings so they can better make ends meet.

Companies are hearing the call and looking for ways to modernize how they pay business partners and employees. They face an array of options to help them with their acceleration efforts, with some choosing to start delivering payroll via push-to-card offerings or directly into workers’ digital wallets, for example. Firms are also looking at options like same-day ACH and The Clearing House's RTP network as they explore how to speed up B2B transactions.

The inaugural edition of the Real-Time Payments Report examines the factors influencing companies’ faster transaction and payroll needs, as well as how firms determine the solutions best suited to the demands of their particular contexts and priorities. The report series will explore these and other latest trends and developments in the space.

Around The Real-Time Payments Landscape

Employers have been working to improve how they pay both full-time and gig workers, and some are finding that the traditional emphasis on paper checks and direct deposits are not going far enough. Direct deposits may be quick but also require employers to collect sensitive bank details on each temporary worker they recruit and do not meet the needs of unbanked staff, while the pandemic has made delivering paper checks more difficult than ever. PNC Bank’s treasury management division recently sought to provide an alternative by offering companies capabilities for suppling employees with prepaid debit cards and then pushing payroll over faster payment rails onto those tools.

Payroll is not the only disbursements that consumers expect to receive quickly, and First Horizon Bank head of treasury product management Somesh Kasibhatla recently made statements on the need to deliver insurance claim and commission payouts quickly as well. The financial institution (FI) is working to facilitate treasurers’ transitions to offering on-demand consumer disbursements while also continuing to have access to more traditional forms of payments should some customers prefer that.

Businesses also demand quicker payments from their corporate clients. PYMNTS research found that microbusinesses say they are more likely to partner with payers that deliver rapid payment experiences. The research also highlighted that corporate buyers may need to do more to ensure their suppliers and vendors are aware of faster payment options, with 52.7 percent of microbusinesses saying they were provided these abilities, whereas 78.8 percent of payers said they offered them.

Find more about these and the rest of the Real-Time Payments headlines in the Report.

Inside Businesses’ Faster Payments Selections

Companies are working to accelerate their payroll and B2B transactions, but there is no single solution that fits all firms’ needs. Same-day ACH may appeal to some companies, while the RTP network suits others, for example. But how can firms come to these conclusions?

Adam Carter, vice president of global treasury management, faster payments at U.S. Bank, and Sara Cichoski, vice president of eEnterprise money movement at U.S. Bank, representing Elavon, explain in this month’s Feature Story how businesses weigh factors like speed, price, cash flow reporting and ease of implementation to determine the approach right for them.

Download the Report to read the full story.

Deep Dive: How Payment Apps And Real-Time Rails Are Accelerating B2B, P2P Transactions

Consumers and businesses alike are generating demand for swift, digital payment tools during the pandemic. Shoppers want to transact while avoiding the contagion risk involved in face-to-face interactions and so are turning to offerings like digital wallets to help. Businesses are also tapping faster payment options to help meet clients’ and employees’ needs to receive funds more quickly and conveniently.

The Deep Dive explores the various use cases that are generating demand for more rapid disbursements and how solutions like digital wallets, payroll apps and real-time rails are being leveraged.

Find the Deep Dive in the Report.

About The Report

The Real-Time Payments Report, a PYMNTS and The Clearing House collaboration, is a monthly report series examining how faster payment offerings are helping companies and consumers overcome transaction and payroll frictions.