A Note from the Chairman: Carpe Diem Instant Payments

June 22, 2022

As the lifeblood of the U.S. economy, small businesses have reverberating impacts on the industries and communities they serve. In many cases, their expertise extends into areas other than financial services. That’s why they seek financial partners to help them navigate everything from cash flow to growth strategies and beyond. And as the purveyors of more than 60% of all small business loans (icba.org), community banks often assume that chief financial advisor role.

But as any community bank can attest, no two small businesses are the same. They can range from sole proprietors to just under 500 employees. They serve different industries, audiences, and needs, and their level of payments prowess varies greatly.

At State Bank Northwest, we recently helped a long-standing small business customer transition to electronic payroll. For years, we have been encouraging direct deposit, but they stuck to what they knew. Something shifted in their operations in today’s post-COVID environment, however, and they decided to give direct deposit a try. The business went live in the second half of April and couldn’t believe how much more effective and efficient it was. They were thankful that we stood by their side, sharing information, and helping them navigate the process on their timeline.

As small businesses explore efficiencies, we’ve also seen an increasing demand for other digital payments. Take remote deposit capture (RDC), for example. We have offered it for years and have great penetration with our client base; recently, it has been a game-changer for our customers, particularly those in rural areas, simplifying their deposit process and saving them time and money.

Now we’re entering the phase of instant payments. In many cases, our customers aren’t requesting instant transactions, but these payments offer another tool in our arsenal, as we consider a wide range of small business needs.

As a community bank navigating these shifting waters, ICBA Bancard has been our ally, helping us to dive deeper into the specifics of instant payments and pinpoint small business use cases to help us determine how best to make a splash. This issue of Bancard Confidential covers a wide range of small business payments insights, including ways small businesses can benefit from faster transactions. While we may not immediately implement instant payments, arming ourselves with information will help us make strategic decisions moving forward.

And as payments continue to evolve, we will continue to rely on ICBA Bancard to identify those payment channels that meet our customers’ unique needs. Because we are relationship bankers, and we are our small business customers’ financial partners now and into the future.

Greg Deckard is ICBA Bancard’s chairman and is the CEO and chairman of State Bank Northwest, a $250 million-asset community bank in Spokane, Wash.