How community banks can accelerate small business cash flow through real-time payments

Small businesses are the engine of local economies, yet many continue to operate with payment processes that were not built for today’s pace of commerce. Delays in getting paid remain a persistent obstacle: 80 percent of small firms report challenges with digital payments, and late invoice payments remain common across industries. For small- and mid-size businesses (SMBs), waiting weeks to access earned revenue directly affects liquidity, restricts reinvestment, and complicates relationships with customers and suppliers..Community banks are well-positioned to change this dynamic. Regional bankers have deep local market knowledge and long-standing business relationships that enable them to play a significant role in modernizing how SMBs move money. By integrating instant payment workflows into their offerings, banks can accelerate cash flow for local SMBs while creating new sources of fee-based revenue.Why payment speed matters more than everCash flow predictability is critical for small businesses. Delayed payments force businesses to bridge gaps by drawing on credit lines, postponing vendor payments, and diverting staff time to collections and reconciliation. These inefficiencies lead to administrative burden, limiting growth and increasing operational risks over time.Faster payment capabilities fundamentally change this process. When funds are available in real time, businesses gain immediate visibility into their cash position, increase transaction volume, and accelerate revenue recognition. This enables more confident decision-making, from hiring and inventory purchases to capital investments and expansion planning. Timely payments also strengthen supplier relationships and reduce the likelihood of late fees, penalties, or strained partnerships.Despite customer expectations continuing to rise, many SMBs still rely on billing and payment workflows that force customers through multiple steps, logins, or third-party portals. These friction points increase abandonment and delay settlement. Modern options such as pay-by-bank enable businesses to simplify the payment experience, reduce processing costs, accelerate access to funds, and reach a wider payer base, giving customers a more flexible and convenient way to pay.A strategic opportunity for community banksSMBs represent a meaningful growth and differentiation opportunity for community banks, particularly as competition for core lending and deposits intensifies. Faster payment services provide a compelling value proposition that goes beyond traditional transaction banking. When real-time payments are embedded directly into digital banking platforms, business customers gain tools designed for day-to-day operations that offer more than just basic money movement. They can issue invoices, pay vendors, manage payroll, and track transactions in real time from a single interface. For many businesses, the capability to send and receive funds instantly is worth paying additional fees, given the direct impact on cash flow and efficiency. This also creates a scalable source of non-interest income for community banks while increasing transaction volume and account stickiness.Increased payment activity drives deeper banking engagement and positions institutions as integral to business operations. That engagement creates natural opportunities to introduce complementary services such as treasury management, lending, and cash flow analytics, strengthening long-term community relationships.Practical paths to implementationReal-time payment solutions can be delivered without major disruption to existing core systems. Capabilities such as QR-code-enabled payments allow businesses to send invoices and receive funds instantly across multiple rails, including FedNow, ACH, and The Clearing House’s RTP network. Payments are secure, automatically reconciled, and do not require sharing sensitive account credentials.By working with specialized payments partners, community banks can offer these capabilities efficiently while maintaining strong compliance, security, and risk controls. The result is a scalable solution that benefits both the bank and its business customers.Moving from infrastructure to impactFaster payments are more than a technology upgrade for community banks — they are a practical way to help local businesses operate with greater financial confidence and resilience. Predictable cash flow, streamlined operations, and improved supplier relationships translate directly into stronger local economies.By enabling SMBs to send and receive money instantly, community banks deliver measurable value that extends beyond convenience. Businesses reduce costs, strengthen relationships, and can pursue more growth opportunities while banks benefit from increased engagement, diversified revenue, and a stronger competitive position.As expectations around speed and transparency continue to rise, faster payments are becoming a foundational capability for serving small businesses. Community banks that act now can reinforce their role as indispensable partners to local enterprises, generating new revenue, increasing engagement, and supporting sustainable growth within the communities they serve.Keith Riddle, general manager of Payfinia, brings nearly 40 years of experience across the financial services ecosystem, including issuing and acquiring, bill payment, e-commerce, cloud computing, digital banking, and payment enablement. He now leads Payfinia’s efforts to help community financial institutions modernize their payment strategies by adopting real-time payments and deploying embedded payment experiences through the company’s modular, open framework.