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Dec 05, 2023 483

Nearly 9 in 10 Manufacturers See Real-Time Payments a 2024 Priority

#Fintech

Real-time B2B payments are transforming industries in which the number of payment transactions is very high — such as the manufacturing sector.

Real-time B2B payments are reshaping industries with high transaction volumes, such as manufacturing. A recent study by PYMNTS Intelligence and The Clearing House reveals that nearly all U.S. manufacturing companies embraced real-time payments last year, alongside traditional methods like wire transfers, ACH, or checks. Despite widespread adoption, real-time systems constituted only 15% of all payments made by manufacturing companies, trailing behind sectors like insurance (24%) and real estate (20%). This suggests that, compared to other industries with shorter cash flow cycles, there is ample room for increased adoption in manufacturing.

The allure of real-time payments lies in their speed and traceability, setting them apart from other options. Manufacturers appreciate their ability to enhance B2B relationships, a factor highlighted by 86% of respondents. As 2024 approaches, 6 in 10 manufacturers plan to increase their use of real-time payments, signaling a significant shift in payment preferences. This trend isn't just about expansion; manufacturers anticipate real-time payments replacing other methods, with 96% expecting them to replace checks and 81% targeting standard ACH payments, both known for their extended processing times.

To accommodate this shift, half of manufacturing firms are actively enhancing their capability to send and receive real-time payments. Many are engaging with external partners to achieve this improvement within the next six months. With the Federal Reserve's FedNow® Service still in development, the growth prospects for real-time payments in the manufacturing sector look promising. Enterprises are acclimating to this system, recognizing its real value in daily business operations. If adoption trends persist, real-time payments are poised to become the predominant B2B payment method in manufacturing.

The focus on real-time payments is underscored by the fact that 86% of respondents see them as a priority in their operations for 2024. This reflects a growing acknowledgment of the unique advantages real-time payments offer and the desire among manufacturers to leverage these benefits in their day-to-day financial transactions.