Solving the last-mile problem in SMB payments

For years, the payments industry has poured investment and engineering talent into faster rails and new platforms. That includes real-time networks, digital invoicing, and sophisticated APIs to connect the financial ecosystem. And yet, most small businesses in the U.S. still get paid by paper check.

It’s not because small- and midsized businesses (SMBs) are resisting innovation. It’s because the tools built to modernize payments were never designed with them in mind.

While enterprise finance teams have embraced digital transformation, most SMBs are just trying to stay ahead of cash flow gaps and administrative overload. For the average plumber, accountant, or landscaper, getting paid on time matters far more than the payment rail itself. Unfortunately, the default experience, still dominated by checks, is slow, manual, and often risky.

These businesses operate on thin margins. A 10-day delay from a check payment can trigger a chain reaction: late payroll, missed supply orders, and canceled jobs. Fraud risk and accounting complexity only make things harder. And while payment systems have improved dramatically for payers, they often create friction for recipients.

The problem stems from how payments processing has evolved. Most innovation in this space has focused on the sender, improving how to initiate payments faster, more securely, and in bulk. But when the recipient, particularly a small or micro business, isn’t part of a digital network, those “digital” payments often default back to physical checks.

This happens quietly and frequently. A customer initiates a payment online, thinking it’s handled electronically. But on the back end, the bank or bill pay system realizes it doesn’t have digital delivery credentials for the recipient. The system prints and mails a check. The sender thinks they paid instantly. The business doesn’t see the funds for a week or more.

That’s not a technology failure. It’s a coordination gap. And it affects the smallest players the most.

Small businesses are the backbone of the U.S. economy, creating 50% of the jobs. They power our communities, and they carry the weight of complexity when it comes to getting paid. They are the dreamers, the builders, and the relentless doers being left behind.

Real-time payment rails like RTP and FedNow have enormous long-term potential. But what small businesses are asking for is often much simpler: predictability, security, and easy reconciliation. It is important to understand that rails are not networks that connect both the funds and the data for reconciliation.

Card-based payments often win out not because they are the fastest, but because they provide the most control. Business owners can see when funds are coming, match them to invoices, and reconcile them automatically through accounting systems like QuickBooks. That clarity matters more than shaving a few hours off settlement time and chasing down reconciliation by logging into their bank accounts aligning ACHs to invoices and payments.

Serving this segment is not just about speed or infrastructure. It is about removing the burden of getting paid. It requires a coordinated effort across the ecosystem. Banks, processors, and payables platforms can help move the industry forward by identifying when checks are still being sent and working with partners that can help transition recipients into digital workflows. Small businesses benefit from reduced fraud risk, lower admin burden, and quicker access to working capital. Banks and platforms benefit from increased efficiency and stronger customer relationships.

There is plenty of talk in payments circles about “the last mile.” But when it comes to getting paid, the last mile is often a blind spot. Small businesses are frequently left outside the digital infrastructure, not due to neglect, but because they have not been given an easy way into a small business payment network.

Solving that challenge does not require a leap to a new payment rail disconnected from accounting systems. It requires meeting small businesses where they are and helping them take the next step forward, away from checks and toward solutions that work for them.

Because when a business gets paid the right way, there’s a ripple effect from employees to communities, and to the U.S. economy.

Dan Holt is CEO of BillGO.