Grasshopper Bank is live on the Federal Reserve’s FedNow instant payments rail in response to small business clients’ demand for faster payments. 

“What we’re working on a lot with small businesses is how we help their cash flows, and how we give them access to their money quicker,” Chief Executive Mike Butler told Bank Automation News. 

The digital bank went live on the payment rail this year, Butler told BAN, noting that the bank’s SMB clients are focused on “getting money quicker.” 

FedNow payments volume continues to grow as FIs join the network, according to the Federal Reserve. The total number of payments settled reached 1.3 million in the first quarter, up 43.1% quarter over quarter. 

AI-driven decisioning

In addition to the FedNow offering, Grasshopper is ensuring clients have quick access to credit as they navigate inflation and tariffs, he said. The bank is tapping AI to streamline decisioning time and lending accuracy.  

In a time of uncertainty, “we really hit the pedal with our digital lending,” he said, noting SMBs are stressed and it’s hard to find access to credit quickly. 

Economic stressors

Small businesses remain stressed about macroeconomic conditions, according to U.S. Bank’s Small Business Perspectives Survey, which polled 1,000 U.S. small business owners between March 14 and April 4. 

The report found: 

• 98% said the economic environment is a top stressor; 

• 92% were concerned about inflation; and 

• 81% are stressed about tariffs. 

Grasshopper growth

Grasshopper Bank has onboarded 18,000 small businesses through its digital platform in the past three years and remains committed to its digital strategy to serve the small business segment, Butler said. 

“I am absolutely convinced if you don’t have a digital platform, [the small business market] is not going to be a market you’re going to be consistently in. And from a client perspective, you have to be able to find a bank that’s consistently committed to your sector,” he said.  

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