**Cash is king, and cash flow reigns supreme**—especially for small businesses that must navigate the tumultuous waters of today’s economy. As the market grows increasingly unpredictable, the reliance on traditional payment methods is fading. Instead, small and medium-sized businesses (SMBs) are turning their attention to **instant payments**, a trend reflected in the latest **PYMNTS Intelligence Money Mobility Tracker,** “Immediate Impact: How SMBs Can Benefit From Instant Payments,” a collaboration with **Ingo Payments**.
This insightful report highlights the **diverging adoption rates** of instant payments across various sectors. **Digitally-savvy industries** like gaming and the gig economy are leading the charge, while **traditional sectors** still find themselves tethered to paper checks and manual processes. This disparity raises a crucial question: how can SMBs effectively harness instant payments in their operations?
The Surge of Ad Hoc Payments
Ad hoc payments—those spontaneous, nonrecurring transactions—are becoming increasingly vital for SMBs. They now make up a staggering **55% of total transactions** and a remarkable **69% of total accounts receivable volume** in dollar terms. In an unpredictable financial landscape, fast access to these funds can dramatically enhance cash flow for businesses relying on these types of transactions.
SMBs are acutely aware of the **positive impact** that instant payments can have on their cash flow. According to the latest findings, there has been a notable increase in the share of SMBs opting for **instant methods** to receive ad hoc payments, surging from **20% in 2023 to nearly 33% in 2024**. In fact, a quarter of SMBs are now choosing instant payment options whenever they’re available, while almost half do so **over 75% of the time**. These statistics underscore a significant shift toward more agile financial practices.
Embracing Change: The Role of Forward-Thinking Industries
It comes as no surprise that **forward-thinking industries** embracing digital transformation are at the forefront of adopting ad hoc instant payments. The report reveals that sectors such as gaming and the gig economy are 45% more likely to utilize instant payment options than their more traditional counterparts. This trend isn’t arbitrary; it’s driven by a need for immediate liquidity to compensate freelancers promptly and maintain loyalty.
For **microbusinesses**—those generating less than $100,000 annually—the stakes are even higher. The report indicates that **73% cite improved cash flow** as a primary reason for adopting instant payments. In 2024 alone, an impressive **18% increase** in microbusinesses identified cash flow improvement as their primary motivation compared to the previous year. Furthermore, **29% of SMBs** with annual revenues between $5 million and $25 million also highlighted cash flow as a driving factor in their decision-making.
Challenges: The Road Ahead for Integration
Despite the merits of instant payments, **integration into new payment rails** remains a challenge for many SMBs. Automation is a vital component of this transition. Findings suggest that only **25% of SMBs** relying on **manual accounts receivable (AR)** processes enjoy the benefits of ad hoc instant payments, compared to **37%** that have automated their back-office functions. This gap underscores the importance of modernization in financial practices.
For **microbusinesses**, the burden of manual processes is particularly taxing, with **44% still reliant** on outdated methods. Businesses can alleviate some of these integration concerns by collaborating with **third-party providers** that facilitate access to instant payment systems. Embracing technology and automation will not only improve cash flow but also enhance overall operational efficiency.
As payment landscapes evolve, **staying ahead of the curve** is paramount for SMBs. Adopting instant payment options could be the crucial differentiator that allows these businesses to thrive in a fast-paced economy. The question remains: is your business ready to make the leap?
