Report

Community Bank SMB Competitiveness Report: The Payments Relationship

Community bank SMB clients pay by check at a rate of 63%, versus 45% at the Big 4 banks. Real-time payments are the clearest capability gap.
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Community banks are being shut out of SMB deals on payments. In Datos Insights’ Q1 2026 survey of SMBs, 63% of community bank clients pay by check, versus 45% at the Big 4 banks. FedNow and RTP availability is now an acquisition-stage criterion, and banks without real-time send capability are excluded from those conversations before they begin.

The gap reflects limited digital options and market education, not client preference, so it is closable. Datos Insights recommends four moves, including real-time payments deployed as infrastructure, not a feature, and a structured check migration program. A bank that runs one can realistically migrate 30% of check users to ACH or real-time rails in the near term.

About the Author

Erika Baumann

Erika Baumann

Erika Baumann serves as Director of the Commercial Banking & Payments practice at Datos Insights, focusing on payables and receivables technology and solutions. She has over 10 years of experience in the wholesale banking space, bringing expertise from both banking and fintech vendor positions. She has worked extensively with both U.S. and international banks, vendors, and the clients of each to identify...

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