When money moves slowly for small businesses, the consequences are immediate: tighter cash flow, higher costs, and fewer opportunities to grow. American small businesses closed 2025 with a small late-year increase in hiring, but employment still declined overall compared to the previous year. 2025 also marked the fourth consecutive year of declining revenues for businesses with 1-9 employees. On average, revenue fell by $21,270 per business (-3.46%), signaling that business owners are operating with less cushion.
Reducing payment settlement delays is one of the most direct ways to lower everyday operating costs for Main Street
To do so, Congress can take the practical step of passing the newly introduced Payments Access & Consumer Efficiency (PACE) Act, that would expand payments-only access to Federal Reserve payment rails for qualified, well-regulated, payments-focused companies.
In an economy where costs still feel high, an outdated payments system shouldn’t be another costly headwind. When funds take days to become available after a customer pays, owners are too often forced into short-term financing decisions that impact their bottom line and can result in late fees, unnecessary borrowing, and delayed decisions on payroll and paying their suppliers.
The current payments system is outdated and holding consumers and businesses back
Though the way we pay has evolved and financial technology companies are a substantial part of the financial services ecosystem, traditional depository institutions have been the only organizations allowed to access Federal Reserve payment systems for decades. This means all other non-bank payment service providers, including financial technology companies that process trillions of dollars in transactions annually, still navigate layers of intermediaries. This can add costs, cause delays, and concentrate control in the hands of a few traditional depository institutions. For example, just two banks originate approximately 50% of all US ACH transactions, leaving little incentive to modernize. When additional qualified providers can connect directly, pricing becomes more competitive and businesses face fewer fees and markups that have traditionally been baked into processing.
An updated payments framework that broadens access to responsible payment processors would increase competition in financial services and lower costs for businesses
Americans agree it’s time for a change. In a national survey, 71% of adults expressed that more competition in payment services is important, and 67% support trusted technology companies to directly handle payments if it means their money could move faster, with fewer fees and delays.1
Slow settlement times are a hidden tax
When money is in transit, businesses can’t use it to pay employees, restock inventory, or pay bills on time. Predictable cash flow for businesses can be achieved through payments modernization.
When funds move faster, owners don’t need to use as many expensive bridging strategies. Currently, 49% of small business owners say standard processing times create critical or moderate cash-flow gaps while they wait for payments to clear. Those delays cause business owners to make sacrifices that can be painfully personal.
Intuit’s 2026 Business Owner Survey found that, in the past year, processing delays caused:
- 26% delayed paying their own salary because of processing delays;
- 19% took on additional debt or used a credit card they otherwise wouldn’t; and
- 18% paid a bill late and incurred a fee or penalty.
Evolving the US payments system would better enable businesses to avoid late fees, anticipate credit usage, and are ultimately better equipped for growth.
Rushing to get paid impacts business disproportionately
Lacking access to faster payments, small business owners and entrepreneurs are forced to make difficult tradeoffs like paying to access their funds earlier. 59% of business owners paid an extra fee for instant transfer or fast deposit in the past year, and 15% do it often. Those fees can constrict already thinning margins that owners could allocate to wages, inventory, equipment, or a new hire.
Notably, the burden of these fees is uneven. Hispanic (70%), Black (69%), and Asian-American (66%) owners are more likely than White business owners (54%) to pay extra for quick access to their funds. In 2026, businesses shouldn’t have to choose between paying for speed or waiting days for money they’ve already earned.
Concentrating payment processes increases risk
Restricting access to the federal payment network to only a handful of depository financial institutions makes the whole system less secure by concentrating risk.
Payments from your average consumer or business typically pass through multiple intermediaries before they reach the payment systems; Federal Reserve Banks. Every link connecting one player to the next in the chain introduces more risk, and the costs of pulling these levers add up. When a payment must pass through multiple banks and processors, each one duplicates the same de-risking process. The result for a consumer or small business is higher fees, slower funds availability, and, in the worst case, the inability to obtain service at all.
Future-proofing the payments system will help consumers and business keep more of their money
Modernizing access is also about keeping US businesses competitive in a world where real-time payments are quickly becoming the norm. A modernized system would encourage the development of innovative payment solutions tailored to the needs of small businesses, making American businesses more competitive globally. Other industrialized countries like the UK, the EU, Brazil, Singapore, Canada, Australia, and Japan have already created modern, real-time payment systems, many of which allow broad participation by payment-focused firms. The results have been encouraging: increased competition, lower costs, and increased innovation, all conditions that encourage small business growth. In the UK, direct access to real-time payments reduced customer costs by 20% and cut transaction times to seconds.
Congress has the opportunity to help solve this problem by embracing payments modernization and passing the Payments Access & Consumer Efficiency (PACE) Act. By updating outdated rules and expanding access to modern payment rails, Congress can enable faster, safer, and more secure payments that benefit everyone. Now is the moment to build on the progress already underway and move practical payments modernization legislation forward so the business community can spend less time waiting, and more time growing.
1Intuit. (2025). National Tracking Poll, August 2025 [Unpublished raw data]. Morning Consult.