The world’s supply chain has seen a lot of disruption over the past few years, whether that’s by the rise of transportation costs, or warehouse struggles to meet modern-day demands; there always seems to be some new problem halting this flow. The U.S. specifically, has found trouble integrating real-time money transfers, still reliant on outdated ACH payment methods that slow the process down exponentially.
The typical four-day wait period for ACH payments has proven less than ideal in supply chain operations, as manufacturers must wait for a payment to process to even begin production. This schedule shift creates a domino effect that slows down fulfillment houses operations, which in turn hikes up transportation costs, etc. Any delay in any sector of the supply chain process creates another detrimental interruption somewhere up that chain.
With the continued normalization of real-time payments throughout most of society, it’s only a matter of time before a business equivalent elevates the payment process for the national supply chain. Upgrading the payments process will not only improve the supply chain’s effectiveness in payments, but further its effectiveness throughout other sectors as well.
Faster Than the Speed of Payments
Many countries outside the US have successfully integrated these more advanced B2B payment setups, providing both technologically advanced data security, as well as improved expedience in facilitating payments, successfully transferring funds within seconds. This innovation is especially effective in furthering supply chain efficiency because of its immediacy. As previously stated, manufacturers can’t begin production until the ACH transfer processes, so they can properly pay their workers. Reducing that four-day wait down to mere seconds immediately provides the entire supply chain more time to do their jobs properly and effectively.
The integration of innovations goes beyond just speeding up the supply chain, it completely re-prioritizes the process of being paid. Like most jobs, many employees working in the supply chain aren’t paid until the actual work is done. Furthering this integration of real-time payments could eventually lead to workers being paid before they even start the job. Completely reestablishing their motivation as working in service of what they’ve been paid, not simply working to be paid.
With the convenience and normalization of payment apps like Venmo or Zelle, one may wonder what’s the hold up on integrating these services into B2B setups. This delay stems from the supply chain’s current dependence on ACH payments, and their cost-effective nature in high-volume businesses. New mobile payment methods charge a set of fees based on the business’s transaction volume, which can work just fine in low-volume B2C payment scenarios; but when utilized in B2B setups transferring tens of thousands of dollars between each other, it becomes unreasonably excessive.
A new, effective solution is needed, based on the innovations already seen in B2B ACH payments around the globe. One that simultaneously accelerates payment facilitation between all departments, while also being an affordable investment for any high-volume business.
The Endless Fight for a Faster Supply Chain
The obstacles facing the supply chain extend beyond the continued evolution of payments. There will always be a new external issue facing the global supply chain, but furthering payments technology is an effective way to combat these many different obstacles from multiple different angles. Again, by just eliminating the wait found in ACH payments, you motivate an endless domino effect, forcing the revaluation of operations across multiple stages of the supply chain. This continued improvement and revaluation of operations happen to be in service of one specific goal, simply finding more time to improve your business.