Manufacturers Embrace Digital Giants Over Banks for Real-Time Payments

The landscape of payment practices within the manufacturing sector is undergoing a substantial transformation, with a strong inclination towards real-time payments. According to a report titled «Corporate Changes in Payment Practices: A Deep Dive Into the Manufacturing Sector,» published by PYMNTS Intelligence in collaboration with The Clearing House, instant payments have surged to prominence as the leading method for business-to-business (B2B) transactions within the manufacturing sector.

Overwhelmingly, more than 99% of manufacturers have already adopted real-time payments for their B2B transactions, surpassing traditional methods such as automatic clearing house (ACH) payments, wire transfers, and checks. In particular, real-time payments now constitute 15% of outbound and 14% of inbound B2B transactions.

The study, which drew insights from a survey of 125 manufacturing firms, sheds light on the evolving role of real-time payments in the manufacturing sector’s B2B payments landscape. Key findings include the fact that 86% of manufacturers are actively investing in or planning to invest in real-time payment capabilities within the next 12 months. The driving forces behind this shift are the speed and reliability that real-time payments offer. Moreover, 91% of manufacturers believe that adopting real-time payments will lead to improved relationships with their suppliers.

Manufacturers seeking to bolster their real-time payment capabilities are looking to form partnerships with various payment providers. Notably, 76% of manufacturers plan to collaborate with digital giants such as PayPal, Square, or Stripe, surpassing the 72% willing to engage with FinTechs and traditional banks. Other providers like card network companies, third-party processors, and treasury management system providers are also under consideration by approximately 62%, 45%, and 36% of manufacturers, respectively. Furthermore, 30% of all firms intend to develop and implement their own real-time payment features, underscoring the significance of technology leader partnerships in driving real-time payments innovation.

The survey reveals a distinct shift away from traditional payment methods, with 47% of companies planning to reduce their reliance on checks and 38% intending to do the same with debit cards. Real-time payments and same-day ACH are the only payment methods poised for substantial usage increase among both buyers and suppliers.

The manufacturing sector is swiftly embracing real-time payments as the primary method for conducting B2B transactions. Firms are either actively investing in this transformation or forging strategic partnerships with various payment providers to enhance their real-time payment capabilities. Manufacturers that have not yet embraced this trend should consider expediting their implementation to remain competitive in the evolving B2B payments landscape.