7 In 10 Microbusinesses Prefer to do Business With Firms That Offer Instant Payments for Free

At a time when there are solutions that allow payees to access their funds within 30 minutes of disbursement, and sometimes within seconds, disbursements are still more commonly delivered by methods that can take several days.

These delays are especially taxing for microbusinesses — entities with less than three employees and $500,000 in annual revenue. These very small businesses are concerned with cash flow and do not regard instant payment options as mere fringe benefits; they are twice as likely to want to continue business relationships with entities that offer them.

In fact, 67% of microbusinesses that receive disbursements said they would be at least “somewhat” more likely to continue doing business with a firm that offered to pay them instantly and without fees, according to the Disbursements Satisfaction report, a PYMNTS and Ingo Money collaboration.

Get the study: Disbursements Satisfaction: Monetizing Payout Choice

What’s more, barely 30% of the microbusinesses said they would be likely to do business if disbursement options did not include free instant payments.

Underestimating Instant Payment’s Value to Payees

Many components go into forming long-lasting business relationships — the quality of products and services, as well as personal rapport — but a cornerstone will always involve finances, whether between a company and a contractor, a buyer and a supplier, or an insurer and a client.

PYMNTS research suggests organizations may underestimate the value customers and clients place on reliable and fast payments, even though those payments can cement long-term business relationships. Payors believe that 67% of contractors, suppliers and clients would continue working with their companies, even if they did not offer to send their payments instantly.

Payors also seem to perceive instant payments as more of a sweetener than a dealbreaker, with 65% citing convenience and 57% citing payee preferences as the top two reasons for enabling instant access to funds. The possibility that payees could stop doing business with them was the least-cited reason.

Cementing the Loyalty of Microbusinesses

Only 8% of microbusinesses get their money through instant payments to debit or credit cards, digital wallets or prepaid cards. Checks and bank account deposits remain far more prevalent, even though several days can pass before such funds settle and are accessible.

With instant payments, which allow payees to access their funds within 30 minutes of disbursement — and sometimes within seconds — the funds are transferred directly into any type of account, including bank, prepaid and digital wallet accounts.

Offering instant payments would not only give more payees access to much-needed instant funds, but it would also increase the relatively limited payout options that microbusinesses perceive having, and would help cement the loyalty of microbusinesses.