B2B Payments: How Instant Payments May Facilitate Straight-Through Processing for Businesses

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The payment methods used for business-to-business (B2B) payments affect many business processes. Although checks require significant manual handling, nearly 90 percent of businesses still use them for at least some of their B2B payments (Albers and others 2026a). In contrast, electronic payment methods have the potential to improve overall business efficiency by advancing straight-through processing (STP). Despite this potential, businesses face challenges to advancing STP that stem from the inherent complexity of B2B transactions, coordination difficulties among diverse stakeholders, and technical barriers related to message format and data exchange (Albers and others 2026b).

Instant payments have unique or enhanced functions and features compared with other payment methods, which could help overcome businesses’ challenges related to invoicing, payment initiation and receipt, and reconciliation. These features include request for payment (RfP), business directories, confirmation of payee (CoP), use of the ISO 20022 message standard, around-the-clock service availability, and instantaneous, irrevocable funds availability. This Payments System Research Briefing, the final part of a three-part series, explores how these features of instant payments could advance STP and discusses challenges related to the implementation and adoption of instant payments for businesses.

Functions of instant payments that facilitate automation in invoicing

Invoicing remains a challenge to STP for businesses as it often requires manual handling at multiple steps, but one function of instant payments in particular, request for payment (RfP), could help automate invoicing.^_ RfP enables an individual or business to request a payment through an instant payment network such as FedNow Service or Real-Time Payments (RTP), so suppliers can send all pertinent information in an invoice to their buyers. Even if the RfP cannot serve as an invoice (as required information varies by industry and type of business transaction), the supplier can include the corresponding invoice number in the RfP so that it can be cross-referenced with the original invoice sent outside the instant payment system. Whether or not the RfP serves as an invoice, it can be an effective tool for suppliers to remind their buyers to make payments for outstanding invoices.

In addition to improving suppliers’ invoice exchange processes, RfP may streamline buyers’ invoicing and payment processes. Because instant payments use the ISO 20022 message standard—an international standard for the financial services industry—the information contained in the RfP can be highly structured, allowing buyers to import the information into their accounting system automatically. To initiate the payment, buyers can simply respond to the RfP without creating a separate payment instruction file for the buyer’s financial institution; RfP therefore removes the need for buyers to know their supplier’s bank account details to make an instant payment. The buyers may also add remittance data when responding to the RfP.

Another function of instant payments, business directory services, facilitates the use of RfP by allowing suppliers to send the RfP to their buyers without knowing a buyer’s bank account details. Business directory services map a business’s identifier, such as its registered business number, to its underlying bank account details. These services are often adopted by instant payment systems outside the United States to facilitate businesses’ use of instant payments.^_

Functions and features of instant payments that improve efficiency in payment initiation and receipts

The payment initiation and receipt phase of business processing can also require manual handling at various steps, inhibiting STP (Albers and others 2026b). However, instant payments have the potential to streamline this phase thanks to features such as business directory services, confirmation of payee (CoP), around-the-clock availability of services, and instantaneous, irrevocable funds availability.

First, the business directory services included in instant payments may ease businesses’ payment initiation challenges associated with credit-push payments—that is, transactions in which the payer instructs their financial institution to initiate a funds transfer from their bank account to a recipient’s account. When buyers send payments via credit-push payment methods (including instant payments, wire, and Automated Clearing House, or ACH, credit), they must know the supplier’s bank account details. However, business directories would make this knowledge unnecessary.^_

Second, because instant payments are designed as credit-push payments, they may reduce the manual handling required for returned payments resulting from non-sufficient funds. These returned payments can occur with debit-pull payment methods such as check, ACH debit, and debit card because the supplier’s financial institution does not know the buyer’s account balance. In contrast, with credit-push payment methods such as instant payments, returned payments resulting from non-sufficient funds are less likely to occur, as the buyer’s financial institution confirms that the account has a sufficient balance before the payment is initiated.

Third, if CoP—a function that confirms the payment recipient’s name and account—is added to the payment flow, instant payments could also avoid returned payments resulting from a nonexistent or unmatched recipient’s account. CoP may also mitigate certain types of scams such as invoice scams (Pathak n.d.).^_ CoP may be better suited for instant payments than other credit-push payment methods; because receiving financial institutions are expected to be online at all times to process instant payments, they can thus be expected to respond immediately to CoP (which is not the case for wire and ACH credit payments).

Fourth, because funds are available instantaneously for recipients—and because sending financial institutions are immediately notified of the payment completion—instant payments allow both suppliers and buyers to track payments more easily. With instant payments, senders and receivers can see the processing status of a payment immediately. In contrast, with all other types of electronic payments, the sending financial institution must use the payment’s unique ID to request a payment processing status from the payment system operator or the receiving financial institution. Thus, businesses can find missing or misdirected instant payments more quickly than with other types of payments.^_

Fifth, the irrevocability of instant payments may also reduce the manual handling and cash flow management challenges caused by payment reversals. Instant payments (and wire payments) are irrevocable once the buyer’s financial institution has initiated the payment, protecting suppliers from payment reversals after funds have been credited. This certainty of settlement, coupled with instantaneous funds availability, is particularly valuable for high-value transactions that increase cash flow quickly and predictably.^_ In contrast, ACH and card payments are revocable.^_ For ACH payments, buyers can request a reversal of payment within five business days of the original transaction settlement day because of specific technical errors or unauthorized transactions. For card payments, buyers can dispute transactions for unauthorized charges, billing errors, or poor-quality goods or services.

Finally, instant payments’ around-the-clock service availability helps improve cash flow for businesses. In contrast to other payment methods, instant payments enable suppliers to receive the funds at any time, including outside financial institutions’ operating hours. Coupled with instantaneous, irrevocable funds availability, the around-the-clock service availability allows suppliers to access funds more quickly than any other traditional payment method and enables buyers to make payments at the latest possible moment to avoid late-payment penalties or to receive any negotiated discounts for early payments.^_

Features of instant payments that facilitate automation in reconciliation

Two features of instant payments—remittance data transport and use of the ISO 20022 standard for remittance data—have the potential to facilitate automation in the final phase of business processing, reconciliation. Instant payments (and wire payments) allow rich, structured remittance data to travel along with the payment, which may eliminate the need for additional detailed remittance data to be exchanged outside the payment networks (Albers and others 2026b).

The structured data format of the ISO 20022 standard used by instant payments may enable suppliers to automatically import remittance data into their accounting system. If an instant payment is made as a response to RfP—and if the RfP contains sufficiently detailed information in the invoice—businesses may not need to reassociate the invoice record with payment and remittance data.^_

New and remaining challenges with instant payments

For instant payments to advance STP, businesses, their service providers, financial institutions, and instant payments system operators need to overcome several challenges. Some challenges are new, as they are unique to instant payments; other challenges are persistent and common across all payment methods.

Lack of ubiquitous adoption

Because instant payment systems were recently implemented (RTP in 2017 and FedNow in 2023), instant payments have yet to achieve ubiquitous adoption among financial institutions and B2B payment service providers. As of September 2026, over 2,100 financial institutions (out of more than 8,000) have joined at least one of the two instant payment networks. Among financial institutions that have adopted instant payments, some have the capability to both send and receive instant payments, while others have the capability to receive only. As a result, businesses can receive instant payments if they bank with financial institutions that have adopted instant payments, but they cannot send instant payments if they do not bank with “send-and-receive” financial institutions.

Like financial institutions, B2B payment service providers’ adoption of instant payments has been gradual, and many B2B payment service providers have yet to make instant payments available to their business customers. As an early adopter, Intuit, one of the largest B2B service providers, completed the FedNow service certification in April 2026, enabling instant payment capabilities in its business transaction platform, QuickBooks. Other B2B network providers, electronic invoice presentment and payment (EIPP) providers, and accounts receivable (AR) or accounts payable (AP) solution providers may follow suit, though adoption speed may vary by provider.^_ Among financial institutions that provide AR, AP, or payment solutions to businesses, some have started offering instant payment capabilities, while others have not yet adopted instant payments or activated the “send” capability (BNY Mellon n.d.; U.S. Bank n.d.).

Because adoption of instant payments has not been ubiquitous among financial institutions and B2B payment service providers, businesses that have the capability to send or receive instant payments may choose not to use instant payments. Before making a choice of payment method, buyers that can send instant payments need to know whether their suppliers can receive instant payments. Likewise, suppliers that can send RfP need to know if their buyers can respond. Some businesses may take this extra step of checking their trading parties’ instant payment send or receive capability, while others may not do so until adoption becomes more widespread.

Underdeveloped instant payments functions and features

Although instant payments have several functions and features that could facilitate STP, many of these features need more time to mature. First, ISO 20022 message fields need further defining for RfP and remittance data to carry sufficiently detailed information in a structured way and thus support STP. Although current RfP may be adequate for simple point-of-sale or bill payments, it may not yet support STP for invoicing more complex B2B transactions. Extending RfP to accommodate more detailed information may help reduce businesses’ needs for exchanging invoices outside the instant payments system. For remittance data, efforts to define the ISO 20022 message format are underway. In 2022, the Accredited Standards Committee (ACS) X9 developed the “ISO 20022 Remittance Content Market Guide,” providing direction to buyers about what remittance information to include in each message field. In 2024, the Digital Business Networks Alliance (DBNAlliance) tested and adopted the X9 ISO 20022 e-remittance information standard for use in its exchange framework (ACS X9 n.d.; DBNAlliance 2024, 2025). Nevertheless, some business sectors, such as construction and healthcare, may need to further define sector-specific ISO 20022 message fields.

Second, business directories for instant payments (and for credit-push payment methods in general) are not yet comprehensive. Although existing business directories might be extended for instant payments, today they are used only for limited credit-push payments. For example, the Universal Payment Identification Code (UPIC), which is owned and governed by The Clearing House (TCH), serves as a business directory used only for ACH credit payments processed by the Electronic Payments Network (EPN), owned by TCH (TCH n.d.). Zelle, which started as a digital person-to-person network using a consumer directory, has expanded its use cases to include person-to-small-business payments, and thus its directory now includes small businesses; however, like UPIC, Zelle’s directory is used only for payments within Zelle. Although the U.S. Faster Payments Council (2025) articulates how a (business) directory service can facilitate instant payments, so far, no comprehensive initiatives have emerged to implement such a service. One initiative underway among businesses may serve as a substitute for business directories. DBNAlliance has developed a business data exchange network, in which businesses can exchange invoices and remittance data securely using a participant ID look-up tool (DBNAlliance 2026). Because of secure invoice exchanges, suppliers may include their bank account details in their invoices, thereby removing the need for business directories with both buyer and supplier participation.

Third, CoP has not yet been built into the flow of instant payments in the United States; instead, payee name verification or bank account validation is typically conducted separately from each instant payment. For example, the Federal Reserve recently started offering an optional payee name verification service to qualified financial institutions, which is independent of the FedNow service (Federal Reserve Banks 2026). For businesses, several bank account validation services (such as Nacha’s Phixius and Mastercard’s Track Business Payment Service) are available to mitigate fraud and errors due to wrong bank account numbers (Nacha n.d.; Mastercard n.d.). In contrast to these verification or validation services, Zelle has CoP within its payment flow, though implementation varies by financial institution. In other countries, including Australia, the UK, and the Single Euro Payments Area, CoP (or verification of payee) has been adopted as an industry initiative or made mandatory by regulators (Australian Banking Association 2025; Payment Systems Regulator 2024; IBAN n.d.).

Businesses’ limited resources and incentives

While most businesses acknowledge the benefits of instant payments, some businesses may face resource constraints to updating their accounting systems to adopt instant payments and the ISO 20022 message standard for invoice and remittance data (AFP 2023).^_ Many businesses still use legacy accounting software and enterprise resource planning (ERP) systems that are geared toward checks, and these systems may not easily integrate with instant payments or support automated internal business processes (Albers and others 2026b).^_ Businesses often cite upfront costs to develop or update their accounting systems and a shortage of IT resources to transition from checks to digital payments as major barriers to adopting instant payments (AFP 2022, 2023, 2025).

Businesses may also hesitate to adopt instant payments when they are uncertain whether instant payments could reduce their overall ongoing costs, including both labor costs and fees paid to external parties. Compared with other payment methods, instant payments reduce a business’s labor costs by lowering the manual handling required; however, because instant payments are new, many businesses may not know the fees they may incur to send or receive an instant payment.^_ Among traditional payment methods, ACH has the lowest fee per payment for both sending and receiving organizations, followed by checks. Wire, credit cards, and debit cards have higher fees than ACH and checks (Albers 2026a). Although fees may vary by financial institution or business payment service provider and may change over time, some financial institutions currently set a fee for businesses to send or receive an instant payment that is comparable to the fee per check payment.^_

Finally, not all buyers prefer faster payments for every payment. Buyers that desire to retain outgoing cash for as long as possible may prefer checks because they increase float, or the amount of time before a buyer’s account gets debited to settle a supplier payment. However, buyers’ preference for float may also have diminished, as a recent business survey found that many businesses acknowledge the (faster) speed of payment as a primary driver in their choice of payment method (AFP 2022).

Summary

Compared with traditional payment methods, instant payments have the potential to better facilitate STP by streamlining many business processes, including invoicing, payment initiation and receipt, remittance data, and reconciliation. RfP enables suppliers to send detailed information in an invoice to their buyers through an instant payment network, allowing buyers to receive payment requests through their own financial institution and make a payment simply by responding to RfP. Instant payments allow rich and structured remittance data using the ISO 20022 message standard to travel along with a payment, enabling automated reconciliation among the invoice, payment, and remittance advice. CoP could be added to instant payments’ payment flow, helping avoid misdirected payments and mitigating certain types of scams. Other features of instant payments, such as irrevocability and around-the-clock availability, could also reduce the manual handling required to process business transactions as well as ease difficulties in cash flow management.

To realize instant payments’ potential to advance STP, businesses, their service providers, financial institutions, and instant payment system operators need to overcome several challenges. Because instant payments were recently implemented, new challenges include a lack of ubiquitous adoption and underdeveloped functions and features. Until instant payments achieve a certain level of adoption, many businesses may not readily use instant payments, as they may avoid the extra step of checking their counterparts’ instant payment capabilities. A lack of comprehensive business directories may impede suppliers’ use of RfP, and sector-specific ISO 20022 message fields of remittance data may need to mature further before businesses exchange remittance data via an instant payment network. Challenges common across electronic payment methods include businesses’ limited resources and incentives, such as scarce IT resources and high upfront costs to adopt instant or other electronic payments, and uncertainty in the overall ongoing costs to send or receive an instant payment. Going forward, all stakeholders, including businesses, payments system operators, financial institutions, and business-processing service providers can play a part in addressing these challenges.