Rebuilding Payments in the Construction Industry

This report discusses the urgent need for improved payment solutions in the construction industry, particularly in the context of ongoing issues with slow payments. It highlights that new construction in the United States has been growing since 2021, yet the sector continues to face significant challenges due to delayed payments, which have worsened since the pandemic. The report details how 76% of subcontractors still rely on paper checks, indicating a reliance on outdated payment processes. It presents findings from PYMNTS Intelligence research, revealing that 30% of construction companies are looking to adopt digital technologies to enhance payment speed and cash flow management. The report also outlines the financial implications of slow payments, noting that they account for approximately 14% of total construction costs, amounting to $273 billion in 2023. Furthermore, it discusses the impact on subcontractors, who often wait over 30 days for payment and face increased financial strain as a result. Digital innovations are suggested as a potential solution to mitigate these issues.