Nearly Half of SMBs Favor Installment Payments and Digital Finance Tools to Improve Cash Flow

U.S. small and midsize businesses have traditionally relied on cash and checks, but delayed settlement, bounced payments and manual reconciliation can strain working capital. A survey by PYMNTS and Mastercard suggests owners increasingly view cards and digital-payment tools as mechanisms for payment protection, cash-flow flexibility and tighter spending controls. The findings challenge the notion that smaller firms are reluctant to digitize payments; many are instead assessing which products offer the clearest operational benefits.

The latest findings show 63% of SMBs are turning to cards for stronger payment protection and cash-flow control. Separately, 45% want to reduce their reliance on cash and checks, rising to 68% among Gen Z business owners — a 23-percentage-point gap. The supplied report details do not specify a publication date, sample size or dollar value of transactions, so the figures measure stated preferences and adoption behavior rather than the total volume of card payments.

PYMNTS Intelligence and Mastercard studied the shift in payment practices among U.S. small and medium-sized businesses, surveying 412 business owners and executives from December 2 to December 20, 2025. Cash and checks remain embedded in supplier payments, invoice approvals and treasury management. Digitization therefore involves more than replacing payment tools; it also affects cash-flow visibility and businesses’ ability to grow.

The report, released on February 25, 2026, found that 45% of respondents were highly interested in reducing their reliance on cash. A March 6 analysis found that 63% viewed business credit cards as the best option for handling disputes and refunds, while 59% valued being able to pay without having cash on hand. In an April 6 roundtable case study, The Nourish Spot said about 85% of its revenue was already received through digital payments. The research did not disclose transaction values.

Small and midsize businesses have thin profit margins and limited liquidity buffers, meaning even a few days’ delay in receivables can affect payroll, hiring and supplier payments. Research by PYMNTS Intelligence and Mastercard found that PDF invoices, checks and manual transfers add steps to the payment process, making ease of settlement an important factor in maintaining stable cash flow.

PYMNTS reported on March 5, 2026, that 52% of payments at Gen Z-run small and midsize businesses were still made in cash. Businesses can embed one-click payment links, automatically populate payment details and send reminders while offering credit cards, bank transfers and digital wallets, with the goal of shortening a 30-day collection cycle to 15 days. The report did not estimate a specific monetary cost from the delays.

Small businesses often mix personal and company financial tools, with personal credit cards remaining a common choice for business expenses because owners are familiar with the application process and find the cards convenient for payments. Research by PYMNTS Intelligence and Mastercard shows that even rewards offered by business cards have not been enough to substantially change owners’ payment habits, highlighting a gap between product incentives and their practical needs.

The latest survey found that as many as 39% of small businesses do not use business cards and instead pay company expenses with personal credit cards. Only 28% of business owners are willing to pay an annual fee for a business rewards card. The related report did not specify the study’s publication date, survey period, actual spending amounts or acceptable annual-fee levels, making a more detailed cost-benefit comparison impossible for now.