Approved invoices can now trigger bank payments automatically

Engineering company Worley has connected its smart-contract platform to HSBC, so an approved invoice can trigger a bank payment without anyone retyping it. A smart contract is software that carries out an instruction once set conditions are met. In this pilot, the payment went out over RTP, an instant payment network.

What changed

According to an Oct. 16 account from The Clearing House, the smart contract can start a payment instruction through HSBC's settlement utility. The pilot also automated invoice checking, including three-way matching, which confirms an invoice agrees with other records. Project teams could see invoice status too.

The blockchain-based system only supplied the instruction. Regular bank rails moved the money, and suppliers were paid through their existing banking setup.

Where it gets tricky

Approved does not always mean pay in full. If a supplier credit has reduced the balance, paying the original amount would be wrong. Worley's pilot built vendor credits into its logic.

Delivery disputes and changed purchase orders need the same care. A business should decide how a payment is paused when the records change. It should also be able to trace who or what authorized each completed payment.

Not every supplier can take instant payments. The system tried RTP first, then used wires or ACH when the supplier's bank could not receive an instant payment. Different suppliers may therefore see different payment methods and confirmation times.

Why the timing matters

• 53% of surveyed firms not yet using RTP for B2B payments expected to start within two years.
• 22% said better integration with accounting or treasury systems would help most. Among firms with at least $25 million in revenue, it was 29%.
• 70% of 150 surveyed executives expected to adopt or expand automated payment matching within 12 months.

Banks have work to do as well. PYMNTS reported in September that 35% of financial institutions were adding centralized third-party payment hubs.

What to do

Businesses testing this can track the time from approval to payment, the number of manual fixes and the effort needed to reconcile payments. Routine purchases with clear acceptance criteria make a practical first test.

Cash timing still matters. Faster payment can support an agreed early-payment discount, but it also spends cash sooner. Whether that pays off depends on the purchase terms and the buyer's funding needs.