Chesapeake Bank, a division of Chesapeake Financial Shares Inc. (OTCQX:CPKF), has introduced a new real-time payments system designed specifically for the trucking industry, allowing truck drivers to receive funds immediately upon completing deliveries and their paperwork is approved.
According to PYMNTS Intelligence's report, 93% of truck drivers would prefer instant payments to receive their earnings, if available.
Quick access to funds and convenience are the main reasons for their preference, helping drivers manage their finances better.
With instant payments truck drivers can easily access funds for expenses like fuel and repairs, overcoming the delays and costs associated with traditional payment methods such as ACH transfers, fuel cards, and wire transfers.
Chesapeake Bank, known for offering the Flexent program focusing on accounts receivable financing since 1995, has taken a significant step forward to address a pressing need in the industry. In 2023, Chesapeake Bank acquired another company to expand their Flexent Division into the transportation industry. The firm then partnered with another vendor to offer real-time payments to the carriers.
“We’re excited about how well it’s gone,” DJ Seeterlin, Chief Innovation and Strategy Officer at Chesapeake Bank told Proactive.
Seeterlin explained that a few years ago, the industry began adopting real-time payment methods, starting with RTP and followed by FedNow from the Federal Reserve.
“Using FedNow and RTP, we can deliver payments directly to our clients' bank accounts, which they can use as needed. We’re excited about it.”
The launch reflects broader trends in the financial services industry towards faster, more efficient payment systems.
Kevin Wood, managing director at Chesapeake Bank and Flexent, explained that this new system allows drivers to access funds immediately after their paperwork is approved, facilitating faster turnaround for fuel, repairs, or any other needs.
"Our adoption rate has been stronger than we anticipated," Wood said.
The company anticipates new revenue streams from this initiative, driven by the high demand for instant payments among truck drivers.
“We’re very involved in learning what’s next and participating in leading roles in the payments industry,” Seeterlin said, noting Chesapeake was “one of the first 25 banks in the country” to adopt real-time payments.
With so many truckers wanting an instant payment solution, Chesapeake believes this will benefit both their trucking and traditional receivables financing businesses.
“There’s a demand for this service, and we’re excited about the ancillary products related to it that can generate revenue and provide high-level service to our customers,” Wood said.