Amplifying the Faster Payments Value Prop for Small Business

Reed Luhtanen, Executive Director, FPC

May is Small Business Month, a month in which we support and encourage the 33.2 million small businesses (which account for 99.9 percent of all businesses) in the United States that serve as an integral part of our economy. But despite their critical role, many small businesses face some of the same hardships as larger businesses: worker shortages, inflation, and cash flow. Faster payments can pay a key role in addressing these challenges. Fortunately, many small businesses are already embracing faster payments and key industry players are helping to ensure that momentum continues.

Take for instance new research released by the Federal Reserve. According to a survey of more than 2,000 businesses - both large and small - 83 percent of them are already using faster payments. And 66 percent indicate that they are likely to use faster payments more often in the future. Given that businesses reported cash flow management and working capital as challenges, it should come as no surprise that the appeal of faster payments is intensifying.

We can also see this similar energy in the growth of Zelle® for business payments. According to the most recent data, an ever-increasing number of small businesses are using Zelle to receive payments. Small businesses received 150 million payments totaling $72 billion in 2022 —  up 77 percent and 84 percent, respectively, from 2021. These businesses also used Zelle to make payments to employees and others. In 2022, small businesses sent 133 million payments totaling $87 billion in 2022. It’s becoming a preferred payment method because in the words of one business owner using the service, “The money goes boom! It’s in my account.” These faster payments help solve the cash flow issue, because money arrives quick, combat inflation as it boosts working capital, and it can satisfy employees looking for immediate access to wages by giving them access to their pay faster.

Not only are we seeing this phenomenon within Zelle, but we are seeing it with the RTP® network as well, with the expansion of services and functionality that can better support small businesses. Take for instance, Request for Payment (RfP). With this functionality, customers, like small businesses, can request a payment from another business. Or document exchange, which enables remittances and other key documents for invoicing and billing to flow with the real-time payment, making reconciliation and other AP/AR functions more manageable. Or the increase in the transaction dollar limit. Moving from $100,000 to a limit of $1 million allows small businesses to process larger transactions in real-time, which can support cash flow, and/or ensure goods and supplies get ordered and delivered in a timely fashion.

And while FedNow℠ is not yet launched, the promise of this option serves the interests of small business. FedNow will encourage additional financial institutions to get on board with real-time payments, many of them community banks that serve small businesses in their local areas. This provides those small businesses with additional opportunity, which they otherwise might not have had, to reap the benefits real-time payments can provide.

Small businesses are the heartbeat of our economy. Ensuring we can find ways to better support them so that they can thrive is paramount. Faster payments serve as one readily available and immediate means to address some of the challenges they face. And as an industry, and organization, it is our job to make sure that we continue to maintain and enhance the value around faster payments for this critical audience segment.

To learn more about what the FPC is doing in support of this faster payments evolution or to learn how you can contribute to our efforts, visit

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