What is preventing retailers from accepting real-time payments?

By Puja Sharma

Investment in real-time payments has been somewhat lower down on the totem pole than in AP or AR, at least in terms of spending priorities. The research shows that only 10% of retailers and a bit less than 13% of manufacturers have made investments in AP-related real-time payments; the intent to do so increases for CFOs in both sectors, but certainly not toward anything resembling a majority. The same holds for accounts receivable functions.

Real-time payments are only being used by a small minority of manufacturers and retailers.

In the report titled “Payments Technology’s Future: Retailers,” PYMNTS and Corcentric conducted joint research. According to “Manufacturers Seek Better Workflows,” the back-office functions of firms in these verticals are being upgraded. But as to just where those efforts are concentrated — well, some areas are getting more attention than others, at least at present.

A better understanding of cash flow

Generally speaking, the efforts to improve accounts payable (AP) and accounts receivables (AR) pay dividends for enterprises. They’re able to garner better visibility into the day-to-day cash-in and cash-out activities and to manage working capital more effectively.

The urgency to do is especially acute three years into a pandemic that has forced us all to go digital, and where supply chain disruptions have been widespread. Supply chain interruptions are especially difficult for retailers and manufacturers, who depend on the smooth movement of physical goods to keep topline momentum in place. Part of the smooth interaction is dependent on procurement, and on paying and getting paid in a timely fashion.

According to the research, around 57% of retailers have already invested in procurement applications. That’s trailed a bit by the 53% of manufacturers who have done so. And in terms of the future plans of the CFOs, the survey shore than 250 in all — about 23% of retailers and 34% of manufacturers plan to invest in improving those procurement functions. Elsewhere, 44% of manufacturers planning to improve working capital and credit systems, while 31% of retailers are in the planning stages of making investments in those same systems.

Drill down a bit, and there are several areas that have several ways of spending, and in fact may not capture much in the way of, capital expenditures over the near term horizon.

Investment in real-time payments has been somewhat lower down on the totem pole than in AP or AR, at least in terms of spending priorities. As per the research, only 10% of retailers and a bit less than 13% of manufacturers have made investments in AP-related real-time payments; the intent to do so increases for CFOs in both sectors, but certainly not toward anything resembling a majority. The same holds for accounts receivable functions.

There’s only a limited amount of capital to go around as these CFOs seek to modernize operations — and it may be the case that, at least for a bit, the need for speed will take a back seat.