Smart Contracts Connect B2B Workflows to Real-Time Payments

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Highlights

For accounts payable and treasury teams, reducing the work between approval and execution smooths the continuum of payments and ultimately supply chain dynamics. A payment instruction generated within the invoice workflow can spare employees from entering the same information into a separate banking process, provided the connection preserves the company’s authorization requirements.

PYMNTS Intelligence’s May report, “Ready and Willing: B2B Payments Are Headed for Real-Time Rails. Here’s How They’re Getting There,” produced with The Clearing House, found that 53% of surveyed firms not already using RTP rails for B2B payments expected to begin within two years.

Across the full sample, 22% selected better integration with accounting, enterprise resource planning or treasury systems as the improvement that would most enhance B2B payment performance. Among businesses with annual revenue of at least $25 million, the share reached 29%.

And, separately, PYMNTS Intelligence August research with Plaid found that 70% of surveyed firms expected to adopt or expand automated payment matching within 12 months. The survey covered 150 executives across seven payment-intensive industries. Planned investment extends automation into matching payments with financial records.

In recent days, Worley, an engineering and project management company, has connected its blockchain-based smart-contract platform to HSBC’s settlement utility. According to an Oct. 16 account from The Clearing House, a smart contract could initiate a payment instruction through the utility, with payment executed over the RTP network. The pilot also automated invoice validation, including three-way matching, and gave project teams access to invoice status information.

In this implementation, the blockchain-based workflow supplied the instruction, while bank payment rails carried the funds. Suppliers received payments through existing banking infrastructure.

Commercial Terms and Automation

A supplier credit illustrates the work involved. Paying an approved invoice at its original amount may be incorrect if a credit has since reduced the balance. The Worley pilot incorporated vendor credits into its automated logic, underscoring the need to account for adjustments before releasing funds.

Delivery disputes and amended purchase orders deserve the same attention during implementation. Businesses should establish how payment instructions are suspended when the underlying commercial records change, and how employees can trace the authorization behind a completed payment. Routing prioritized RTP and allowed payments to move through wires or ACH when the beneficiary bank was unavailable for instant payments. A workflow spanning multiple suppliers therefore needs to accommodate different payment methods and confirmation schedules.

Banks face integration work of their own, as PYMNTS reported in September that 35% of financial institutions were adding centralized third-party payment hubs.

Businesses testing smart contract payment workflows can measure the time from approval to payment, the number of manual interventions and the effort required to reconcile transactions. Routine purchases with clear acceptance criteria provide a practical starting point for evaluating whether automation reduces operating costs.

Treasury teams also retain control over payment timing, which in turn improves the efficiency of day to day cash management. Faster execution can support an agreed early-payment discount, but releasing funds sooner uses cash sooner. The commercial return depends on the terms of the purchase and the buyer’s funding needs. Finance teams faced with fewer entries to “repeat” and fewer transactions to investigate have the runway to operate more strategically.