Higher rates push Nium to pre-fund only half its payments in fiat

Srinivasan's funding plan is the one hard number either executive offered. "Rather than trying to fund everything overnight, we're trying to fund 50% in fiat and then monitoring across our clients' corridors to do 'just in time' funding," Srinivasan, vice president of treasury at Singapore-based Nium, told American Banker ^[6][16]. Going from everything to half cuts the fiat Nium positions ahead of payouts by 50% ^[9]. Nium runs the remainder as "just in time" funding on stablecoins, tied to clients' real-time inventory needs so suppliers are paid when stock is needed and holding costs fall, according to the report ^[7].

The motive is the cost of float. Srinivasan said a higher cost of capital makes it harder to "front" liquidity to fund supply chains, and that technology investments can be delayed as those funds go toward improving liquidity ^[5]. The case that payments firms will slow their tech spending rests on that paraphrase of one executive, and its verb is "can." In American Banker's summary, payment fintechs say the added rate pressure could delay tech investments and other new initiatives ^[4]. Neither the summary nor Srinivasan says whether the delayed projects are the fintechs' own or their clients'.

The two executives also describe different horizons. "This isn't just a short-term situation, there will be higher costs for a long period for small businesses," Srinivasan said. "And a longer duration will further impair businesses." ^[3] Ben Johnson, chief operating officer of Kapitus, expects another increase before the end of 2026 ^[2][17]. He also said the small size of the latest hike should matter less to small firms than fuel costs and tariff charges ^[11]. "However, if rates were to continue to rise throughout 2027, small businesses would feel a significant impact," he said ^[10].

The report American Banker cited backs his ranking. Recent political events, particularly Trump's tariffs, had hurt small businesses more than the 2020 pandemic even before the hike ^[15]. Firms with fewer than 10 employees lost 292,000 jobs in 2025, 4.5 times their 2020 losses, so the pandemic year cost them about 65,000 ^[8][12]. April 2026 was their 13th consecutive month of job losses. Over the year to April, revenue fell 10% at small construction firms and 15.2% at small leisure and hospitality businesses ^[8][13].

The Fed could stop at one hike, leaving tariffs and fuel as the larger costs on Johnson's own ranking ^[11]. It could raise again before the end of 2026, as he expects, lifting the carrying cost on the half of Nium's funding still pre-positioned in fiat ^[2][9]. Or rates could keep climbing through 2027, the case Johnson calls significant ^[10]. I think the second path is the likeliest on Johnson's expectation, and on it the first thing a payments company trims is idle cash, as Nium has, with engineering budgets later if at all ^[2][6]. A payments firm naming a delayed product and blaming rates would show that view wrong.

Johnson gave borrowers similar advice: watch operating margins and start no new project until demand justifies the time and capital ^[18]. The borrowers he expects to feel rates first are those financing daily operations. His list is manufacturers, wholesalers and retailers that use factoring to buy inventory, farmers borrowing for seed and fertilizer, and contractors borrowing to hire a crew and start a job ^[14].