When It Comes to Payments, There's No Such Thing as Choice Overload for SMBs

In a perfect world, small and mid-size businesses want a single platform to manage online and offline sales and payments seamlessly. Given their intense focus on the benefits of embedded finance, they also want payment systems tied directly to invoicing, accounting, and inventory. And, given tight cash flow, SMBs are keen for real-time settlement solutions that offer instant payouts. The panelists debate how small businesses are re-prioritizing digital payment options—credit and debt, mobile wallets, ACH and bank transfers, buy now, pay later,  peer-to-peer payment apps, QR code-based payments, and stablecoins—to arrive at choices to meet their growing desire for low cost, easy to integrate, flexible payments across channels (online, mobile, in-store) that also deliver a frictionless customer experience.

Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Bailey Reutzel (00:08):
All right. Hello everyone. Welcome back. Thank you all so much for being here. I know it's the second day; we're probably getting a little bit wander-y, so let's kick it off. Right now in my wallet, I've got a debit card, I've got a couple of credit cards, and I've got cash. I've probably even got euros from my last trip overseas that I had to feed out. And not only that, but in this device here, I've got a ton of other money. I've got crypto, I've got stablecoins, I've got Apple Pay, and probably others that I'm missing. In this age of monetary plurality, the question is: how do we keep up? We have ever-changing demands from consumers and ever-changing demands from your businesses, maybe on behalf of them or their consumers. That's what we're here to talk about. I'm Bailey Reutzel, the Senior Director of Live Media at American Banker. Let me introduce my lovely panelists: I have Kristen Link, SBK Product Lead at US Bank, and Mary Helen McElfresh, VP of Fraud and Risk Management at Zelle. To set some context, what are your small business customers asking for right now in terms of payment options?

Kristen Link (01:25):
Thanks, Bailey. It's kind of everything. If we think back to yesterday in the opening session with Barlow and looking at some of the segmentation of the business owners out there, we've got to really think about that breadth of segmentation in terms of annual revenue size. What the micro-businesses are looking for is going to look a little bit different than what the smaller businesses want, and that'll continue to evolve as we move upmarket, based on the size of their business, the scale at which they're moving money, and what their end customers—whether B2B or B2C—are seeking in terms of ways to pay them. Then there is just what their suppliers, vendors, providers, and employees are looking for in terms of the payments coming out of their account. It really is the whole range. We do need to offer a broad range of solutions and options, but we need to organize them in a way that makes sense for our users as they interact with them. We must acknowledge that oftentimes we're dealing with the same digital servicing platform for micro and small business customers. Then we start to deal with where the interaction with the commercial platform comes into play and where we need different integrations or access to capabilities based on who we're serving and what their end goals really are.

Bailey Reutzel (03:05):
Sure. And Mary Helen, I'm interested specifically: how have you seen interest in Zelle as a payment method increase over time?

Mary Helen McElfresh (03:17):
Absolutely. We've seen tremendous growth in our small business payments. We have over seven million active small business users today that use Zelle. It isn't just a small business paying others; it's paying their employees. We see the need from small business customers needing that money fast, in real-time. Being able to send money fast, simply, and securely is key. We saw 30% growth year-over-year for the first six months of 2025 compared to 2024, which emphasizes the demand and the need for a small business to move money quickly. It's growing 30% faster than any other payment we have on the network. Small businesses are looking for ways to build and run their businesses, and have those payments hit their accounts quickly so that they can continue to delight their customers.

Kristen Link (04:16):
We are absolutely observing that trend in the growth of Zelle usage for small business. It is in that micro-business segment as we think about the amount and volume of transactions, how it relates to reconciliation processes, et cetera. Zelle is really coming up big for micro-businesses.

Bailey Reutzel (04:39):
I'm interested to talk a little bit further about that because there are a lot of options for micro-businesses. A lot of micro-businesses, like artists or even your local coffee shop, often have a Venmo handle as well. I'm wondering why the move toward Zelle?

Mary Helen McElfresh (05:02):
I think because it hits your checking account directly. That is the differentiated service of Zelle to small businesses. There's no transfer needed beyond that payment coming in. It can be regional based on the small business; you think about surf lessons in California, souvenirs here in Florida, or a hot dog stand in New York. It's flexible for those businesses. The cash hits their account, and that allows them to continue to do business. That's really important for a small business.

Kristen Link (05:38):
I think the hierarchy of needs when it comes to money movement for small businesses is cost, speed, and then ease, in that order. They definitely want the most cost-effective option, and then it has to actually meet their goal. It can be free for me to walk cash or a check over someplace, but that's not going to meet my speed needs. That's where Zelle is really playing well in the micro-business space because it's hitting that speed, ease, and cost need.

Mary Helen McElfresh (06:18):
Frankly, we have three to four million consumers pay a small business in Q2, or perhaps a user that's transacted like a small business. We definitely know there's demand there. We have tools coming out to make it easier for a small business to continue their business and delight their customers. That's really our goal: to make it simpler, secure, and fast.

Bailey Reutzel (06:47):
Talk a little bit more about some of the services that you are trying to build out for your small business customers to make it as easy as possible to add these new payment methods.

Mary Helen McElfresh (06:56):
We're looking to improve the QR code. There are definitely improvements we're hearing back from our customers; they would like simplistic ease. We have "Zelle Tag" launching this month. We've heard from many small businesses, "I don't want to give my personal email or my personal phone number to a customer." We now have a Zelle Tag for small business to make it a more professional type of transaction. We're looking at different payment type indicators to help. You might have businesses where the payment amount might be different or fluctuate. We're looking to have indicators to help small businesses pay employees or vendors. Think about a wedding planner who needs to pay vendors where things change quickly; they need to be able to make those changes and payments. We're looking at understanding what small business customers need and building tools for them to continue to improve.

Bailey Reutzel (08:04):
It's really interesting about the QR codes because I feel like QR codes used to be super annoying, and then COVID happened and we all had to use them on menus. Now we love QR codes.

Kristen Link (08:17):
Absolutely. To Mary Helen's point, understanding what the friction points are in the experiences applies to any type of payment method. Frankly, a lot of the answers are going to be the same in terms of what we need to do there. While QR codes and Zelle tags are playing in the Zelle space, they also play in the digital invoicing space for different payment acceptance methods. The desire to look and feel more professional, especially as a micro-business to their customer, comes up in other payment acceptance. In a recent customer interview, owners expressed hesitancy around "Tap to Pay" because they felt that without a dedicated device, it opened up questions about the level of professionalism and security. As we move upmarket out of the micro-space, there is a big focus on payables management. We are launching things custom-built for business users that integrate with their accounting software and approval workflows, allowing them to manage all incoming requests for payments in a more professional way and moving away from old consumer experiences.

(10:04):
Then we are thinking about options for embedding more software into our banking experiences. We recently launched a partnership with Gusto for embedded payroll within our online banking experience. JPM has done this as well. Gusto is a fantastic partner. We are never going to be payroll experts at the bank, so we think about where the right partnership opportunity is so we can expand our offerings and drive depth of relationship by simplifying their day-to-day. It shouldn't be nine different sites and tools they have to log into. Bringing those pieces together with banking at the core streamlines the process. It removes the steps of going to one place to transfer money, another to check timesheets, and finally another to make payments to employees.

Bailey Reutzel (11:17):
That is what we were talking about at the roundtables yesterday—that small businesses want to do everything with their bank, even if their bank isn't the actual provider. In the Gusto partnership, do your clients have a different login?

Kristen Link (11:38):
They do not. We've streamlined that. It's very clear that Gusto is the payroll provider, which is great for us because Gusto is consistently recognized as the top payroll provider for small business. There's great trust in the market, and it provides us with the opportunity to deepen relationships. It is a huge retention driver; switching payroll is not an easy process. As we think upmarket, we want to drive acquisition of operating accounts and make them sticky. This is an example of where things look different as we move into larger businesses and bring in industry segmentation.

Bailey Reutzel (12:36):
Mary Helen, how are you thinking about partnerships to provide different payment options?

Mary Helen McElfresh (12:44):
We partner heavily with all of our financial institutions. Kristen really hit on it: small businesses want to work with their banks and provide services with their trusted financial institution. That's what we do as well. That is the important piece: being trusted and knowing you're in your financial institution's app making these transactions. We are always looking to innovate and make payments easier for consumers and businesses, really transforming how payments are made.

Bailey Reutzel (13:24):
At the roundtable, they noted that small business clients only want one login. They think anything to do with their money should be in a banking application, even if payroll is separate. I am wondering about the security risks of "one login for all."

Kristen Link (13:50):
We didn't even prep on this, but it's funny because I spend a lot of time working on one login. It started even just at the bank because a business customer could have four or five different logins to interact with our different systems that didn't talk to each other effectively. We've invested significantly in smoothing that experience out to get it down to one login and to make the platforms work together—or at least seem to work together—to the user. When you think about how that extends beyond the walls of the bank, using Gusto as an example, it's about looking at our security practices to find bad actors and protect against account takeover. We general make sure those are in place and that we're extending the same protections to interactions with our partners. We have bidirectional conversations so we're using the power of both fraud prevention engines. Fiserv also has a great fraud prevention engine; anybody using their services is familiar with FraudNet. It's about layering the solutions both parties have together on top of general digital access security rules around MFA, et cetera.

Bailey Reutzel (15:41):
Mary Helen, how are you thinking about risk in these evolving P2P payments?

Mary Helen McElfresh (15:48):
Early Warning is a risk company. From a Zelle perspective, we have robust fraud mitigation controls. As Kristen said, it's layered controls. Our financial institutions have risk controls in place, and we have a second layer. We provide risk insights for Zelle to our participants. Anytime a payment is originated, the Zelle network provides insights into potential risk. Financial institutions make the final decisions on their customer payments. We're constantly looking at risk tools and understanding information to provide risk assessments so you all can make better-informed decisions. As we think about new use cases, we work to understand the risk potential and what controls can mitigate it.

Kristen Link (16:52):
It's just so critical to think about how we can bring more risk indicators into the process to allow us to advance our products. From a product perspective, there's always a tension between managing risk to keep bad actors out and providing the limits customers need to actually run their business. If we're talking about six-figure limits and real-time transactions, that's a tightrope to walk. This is where partnerships are critical to bring all of that in. Early Warning sees more transactions than almost any single financial institution. More data allows for better risk controls and decision-making.

Bailey Reutzel (17:53):
Speaking of risky things, let's talk about crypto. How are you thinking about integrating stablecoins or crypto into your payment suite?

Mary Helen McElfresh (18:16):
There isn't a lot I can say yet, but we did announce Friday that Early Warning is looking into a stablecoin for international money movement. It is about listening to consumers and small business customers and expanding on their need to send money safely, securely, and fast. More information will come in the next couple of months. We are looking to understand the needs and how to innovate to provide that information. Maybe a small business doesn't want to use crypto, but we're looking to understand what's available to provide it to them.

Bailey Reutzel (19:05):
But you were hearing from customers that they did want to use stablecoins for cross-border?

Mary Helen McElfresh (19:11):
For international money, yes.

Kristen Link (19:20):
Like most organizations, everybody is stepping back with recent legislation to put together a crypto and stablecoin strategy. We are doing so while knowing that agencies and regulators need to put together the framework for everyone. It starts with identifying the use cases and users most likely to adopt early. I agree with Mary Helen; in the small business space, it is about low-value cross-border payments. We have a global economy where small businesses source goods and services internationally. Having better, safe, lower-cost access to those transactions will be a huge priority. Personally, that's the use case I'm betting on as one of the top ones to emerge in the near term because it goes back to that hierarchy of cost and speed.

Bailey Reutzel (20:34):
Usually, I talk about these at the same time as FedNow or RTP. I feel like some of the use cases for stablecoins could be solved by those real-time payment networks as more banks join them.

Kristen Link (21:00):
We are about seven years into the journey on instant payment networks, and there hasn't been the broad adoption everybody expected. This is due to a few things. One is what financial institutions are doing to integrate with the networks and what they're extending to customers. Two, small business owners often don't know what real-time payments are—or at least didn't 12 or 15 months ago. However, once they started to interact with it in production, they found value in paying a higher fee for that instant experience. It's one of those unknown needs they don't yet have the full vocabulary to articulate. We need to see broader adoption in instant payment rails domestically. This is why I bet that for stablecoin, there's a higher value use case in international money movement.

Bailey Reutzel (22:30):
You don't know what you need until you have it. Mary Helen, same question.

Mary Helen McElfresh (22:44):
Zelle is settlement-rail agnostic; it operates on ACH and RTP. It's usually the preference of the small business or consumer. Zelle is a "promise to pay" and hits your account immediately or within minutes. For a small business, they may feel like they already have that, but depending on the business need, they may still look into the other real-time settlement realms.

Bailey Reutzel (23:16):
Does Zelle have a chargeback function?

Mary Helen McElfresh (23:22):
Initiating payment is irrevocable. This is why risk controls are so important to ensure money moves where the business intends. You do not have that chargeback process.

Bailey Reutzel (23:38):
It's similar with crypto; once it's gone, it's gone. That's where cost savings come in because you don't have to account for chargebacks. Are you seeing businesses interested in that?

Kristen Link (24:03):
It's an excellent question. Looking through research, I'm not seeing a widespread desire for that "one and done" model yet. In the 2025 Barlow digital banking study, they speak to a desire for fraud protections and more security from their bank. As we look at smaller businesses in the micro-space, they are more accustomed to consumer protections that don't actually apply to businesses. One hurdle is effectively positioning that with users. In Zelle and wire spaces, there's a lot of pre-transaction messaging about fraud. We're trying to provide education upfront. It hits mixed audiences; some see it as an unnecessary friction point in running their business, while others don't understand why it's there. Then there are those who have experienced fraud and might actually read rather than just clicking, but we know most users don't really read.

Bailey Reutzel (25:57):
I don't have time for that either. Speaking of not knowing what you need until you have it, would you suggest banks integrate all these payment options—from stablecoins to BNPL—even if businesses aren't asking for them yet?

Kristen Link (26:38):
As a large bank, our answer needs to be "yes" to all of it. For the broader audience, it depends on your strategy regarding what you build yourself versus partnership opportunities. You have to truly understand your customer base. If you skew toward the micro-segment, you may not need all the same instant payment options because Zelle works for users who don't have a high volume of payments. If you skew more upmarket, it makes sense to dig into the trends and pick rails that meet those needs. There are big instant payment rails, but also other systems that serve similar purposes.

Bailey Reutzel (27:46):
I want to get into the nitty-gritty of integration timelines and costs for these different payments.

Kristen Link (28:21):
This is my day job, particularly as we go through the investment cycle. Integration timelines depend on what you're looking at and the internal infrastructure, but it could be as little as three months. If you have to build out a lot of internal infrastructure, it starts to look like six or nine months. It comes down to evaluating integrations and asking what the lightest and most sustainable way forward is.

Bailey Reutzel (29:06):
Should banks re-architect their core to help plug in these different payment methods?

Kristen Link (29:19):
In a perfect world, yes. How do we reimagine and modernize the core? But I live in reality where that's not always possible. I love a blank sheet of paper, but I don't often get one. It's about gaining a deep understanding of core systems and integrations and thinking through how to modernize incrementally. We need to get off those COBOL core systems everyone deals with. I could say some dirty words like "Hogan" here. It's about doing it little by little. The long-term vision is critical. Your core systems are your customer records. We need to lift pieces out of archaic systems that are expensive and difficult to work with to accelerate what we're building, whether that's authentication, user management, or money movement. Everything has to tie back to the customer record to ensure that when a transaction happens, it's the right person on behalf of the business within the set limits and approval workflows. How do we modernize that?

Bailey Reutzel (31:44):
What is the cost range for a three-month integration?

Kristen Link (31:53):
This varies, but in my experience, a three-month implementation involving core systems is probably in the $350k to $500k range. When focusing at that level with multiple systems and teams, and ensuring the experience works the first time, that's a good ballpark.

Bailey Reutzel (32:32):
Mary Helen, how long does it take to integrate into Zelle?

Mary Helen McElfresh (32:39):
It depends on whether you go direct or through a core processor or reseller. If you go direct, it could be a couple of months or longer. You have to understand the network rules and data contribution. Organizations should assess what works best for them; those timelines vary. I don't have the pricing on hand.

Bailey Reutzel (33:18):
How are you thinking about competing with newer bank and Fintech players?

Kristen Link (33:39):
Our scale gives us a real opportunity because we own a merchant acquiring business, have robust treasury management, and offer the full suite from consumer to corporate products. It comes down to executing on all our pieces and making them work together. A Fintech's advantage is that they started with a narrow focus and a blank sheet of paper, so they don't have legacy baggage. Banks need to identify the most critical jobs our users are doing and elevate that experience to compete. We need to bring pieces together so the interoperability is greater than the sum of the parts. Fintechs are never going to have the cost of funds that banks do. We take the experiences and digital capabilities and layer core banking on top of it.

Bailey Reutzel (35:10):
I've been talking to many people about whether banks are good at marketing that core piece. Fintechs are so good at it. Mary Helen, how have you been marketing Zelle within the banking system to compete with other P2P players?

Mary Helen McElfresh (35:44):
With Zelle, it's about safe payments and knowing who you're paying. We have over 2,300 financial institutions in the network. We saw $100 trillion in 2024 across Zelle, which is amazing. It is the trusted source of where payments are made that allows us to excel. Knowing it's fast, safe, secure, and that you get money in your account within minutes is important. Our small business customers understand and appreciate that as part of their business model.

Bailey Reutzel (36:37):
Well, you have the thing that everybody wants. You just have to market it appropriately. We have run out of time. Join me in thanking this panel. Thank you.