The Problem: Construction Payment Is Broken
Construction has the worst late payment record of any industry in the UK. The average construction invoice takes 45 days to be paid, and for smaller contractors and subcontractors, that figure is often worse. A 2023 survey by the Federation of Master Builders found that 27% of construction SMEs had experienced payment delays of 60 days or more in the previous 12 months.
If you run a construction business — whether you are a general contractor, specialist subcontractor, or sole trader doing extensions and renovations — you already know the pain. You finish a stage of work, send an invoice by email or post, and then wait. And wait. The client says they did not receive it. Or they want to query something. Or they are waiting for their own payment before they can pay you. Meanwhile, your material suppliers want paying on 30-day terms, your team needs wages on Friday, and your cash flow is stretched to breaking point.
The fundamental problem is that construction payment processes have not changed in decades. Stage payments are tracked on spreadsheets or scribbled on paper. Invoices go out as PDFs attached to emails. Payment is by bank transfer, which means the client has to manually set up a payee, type in your account details, and choose to make the payment. Every step introduces delay and friction. When you multiply this across multiple projects running simultaneously — each with their own stage payment schedules, retention clauses, and variation orders — managing payment becomes a full-time job.
There is a better way. Modern payment methods designed for service businesses can dramatically reduce the time between completing work and getting paid, while creating the clear audit trail that construction projects demand.
Your Options for Collecting Construction Payments
Bank Transfer (BACS / Faster Payments)
Bank transfer is the default payment method in UK construction. It is free to send and receive, handles large amounts without issue, and every business has a bank account. For these reasons, it will likely remain part of how construction companies get paid for the foreseeable future.
However, bank transfer puts the effort entirely on the client. They need your sort code and account number, they need to log into their banking app, they need to set you up as a payee (which can take 24 hours for the first payment), and they need to reference the payment correctly so you can match it to the right project and stage. For a busy property developer running six projects simultaneously, paying a dozen contractors each on different stage schedules, this is a real burden — and it is your invoices that drop to the bottom of the pile.
The other issue with bank transfers is the lack of a shared record. You know you sent an invoice. You think the client received it. But you cannot prove when they opened it, whether they saw the correct amount, or when they initiated payment. This ambiguity is what fuels disputes.
Payment Links
Payment links are the modern alternative that works particularly well for construction stage payments. When a stage is complete and signed off, you send the client a link by text message, email, or WhatsApp. They tap the link, see a branded checkout page showing the stage description and amount, and pay by card. The payment is confirmed instantly and both parties receive a receipt.
For construction, this has several specific advantages. First, you can send the link the moment a stage is complete — while the client is still on site, or immediately after they have seen the work. Catching the client at the point of satisfaction dramatically improves payment speed. Second, payment links create a timestamped audit trail: you can see when the link was sent, when it was opened, and when payment was made. This is invaluable for dispute resolution. Third, your office team can send links on behalf of site managers, meaning the person doing the work does not have to handle the payment admin.
The main limitation for construction is transaction size. Card payments are subject to the client's card limit, which for debit cards is typically £5,000-£25,000 per day. For a £3,000 stage payment on a kitchen installation, this is no problem. For a £40,000 stage payment on a new build, the client may need to use a credit card or make the payment in parts. Some payment link providers offer higher limits or alternative payment methods alongside card payments to handle this.
Card Machines
Card machines are common in retail and hospitality, but they are a poor fit for construction. The transaction values in construction regularly exceed contactless limits and even standard card limits. A card machine rental costs £15-30 per month per device, and on a construction site — with dust, rain, and the general chaos of a building project — terminals get damaged or lost. Battery life is another problem: a card machine left in a van all day in winter may not hold charge. And connectivity is unreliable in basements, scaffolded buildings, and rural sites.
Some smaller trade businesses (handymen, locksmiths, plumbers doing one-off callouts) do use card machines for jobs under £1,000 with some success. But for construction businesses managing projects with multiple stage payments, a card machine solves the wrong problem.
Invoice Factoring
Invoice factoring is common in construction precisely because late payment is so endemic. A factoring company advances you 80-90% of your invoice value immediately, then collects the full amount from your client and pays you the balance minus their fee (typically 1-5% of the invoice value plus an annual facility charge).
Factoring solves the cash flow problem but at a significant cost. On a £100,000 contract, factoring fees can easily reach £3,000-£5,000. It also means a third party is contacting your clients about payment, which can affect the relationship. Factoring makes sense for large subcontractors dealing with main contractors who have 60-90 day payment terms, but for businesses dealing directly with homeowners or commercial clients, improving your payment collection method is a cheaper and simpler first step.
Cheques
Still surprisingly common in construction, especially with older clients and on larger projects. Cheques are slow (3-5 working days to clear), can bounce, and require a trip to the bank. They are declining year on year and most payment providers now recommend moving clients away from cheques entirely. If you are still accepting cheques as a significant proportion of your payments, any digital method will be an improvement.
How Payment Links Work for Construction Businesses
Payment links are particularly well-suited to the way construction businesses operate because they mirror the stage payment model that the industry already uses.
Here is how a typical construction payment flow works with payment links. You agree a payment schedule with the client before work begins — for example, 10% deposit, 25% at foundations, 25% at first fix, 25% at second fix, and 15% at completion (with a 5% retention). Each stage has a clear description and agreed value.
When you complete the foundations and the client (or their architect, or the building control officer) signs the stage off, your office sends a payment link for 25% of the contract value. The link includes a description like "Stage 2 — Foundations complete — 14 Acacia Avenue" so the client knows exactly what they are paying for. The client receives the link by text or email, taps it, and pays by card on a branded checkout page. You receive confirmation within seconds and your records update automatically.
For your office, this means no more chasing. No more "I didn't get the invoice." No more calling the client three weeks later to ask if they plan to pay. The link either gets paid or it does not, and you have a clear record either way.
For businesses managing multiple projects simultaneously, this is transformative. Instead of a spreadsheet tracking which invoices have been sent, which have been acknowledged, and which have been paid, you have a dashboard showing real-time payment status across all your projects. Your quantity surveyor or office manager can see at a glance which stages are paid, which are outstanding, and which are overdue.
Payment links also handle variation orders cleanly. When the client agrees to an additional cost — say, upgrading the kitchen worktops or adding an extra socket — you create a new payment link for the variation amount with a clear description. This keeps variations separate from the main stage payments, reducing disputes at the end of the project.
Taking Payments Over the Phone
Phone payments are relevant for construction businesses in specific scenarios. When a homeowner calls your office to pay a deposit for a small job — a new bathroom, a driveway, a loft conversion — taking the payment there and then, while they are motivated, significantly reduces the chance of them going with a competitor.
Traditionally, taking card payments over the phone means asking the customer to read out their card number, expiry date, and CVC while your office staff types it into a terminal. This is a PCI compliance risk: if you write down or store card details, you are liable for any data breach. Most construction companies that take phone payments are technically non-compliant without realising it.
Voice Checkout technology solves this by letting the customer enter their card details using their phone keypad during the call. Your staff never hear or see the card details, which means full PCI compliance without any additional security infrastructure. For a construction office that handles 10-20 deposit calls per week, this removes a genuine compliance risk while making the payment process faster and more professional.
That said, for larger stage payments on active projects, payment links sent by text are usually more appropriate. The client can pay when they are ready, review the amount and description, and there is a clear paper trail of the request and payment.
What to Look For in a Payment Solution for Construction
Construction businesses have specific requirements that not every payment provider meets. Here is what to evaluate.
High transaction limits. Construction payments are often larger than those in other service industries. Check whether your provider limits individual transactions or daily totals. A provider that caps transactions at £1,000 is useless for a business that routinely collects £5,000-£20,000 stage payments. Look for providers that support transactions of at least £10,000 or that offer flexible limits based on your business profile.
Clear payment descriptions. Every payment link you send should include a description that identifies the project, the stage, and the work covered. This is not just good practice — it is your first line of defence in a dispute. If a client claims they paid for work that was not completed, a payment link that says "Stage 3 — First Fix Electrics and Plumbing — 14 Acacia Avenue" is far stronger evidence than a bank transfer reference reading "PAYMENT".
Team access. In a construction business with 5-20+ staff, multiple people may need to send payment requests. Site managers need to trigger payment collection when a stage is complete. The office team needs to see the status of all payments across all projects. The owner needs a financial overview. Look for a provider that supports multiple users with appropriate permissions rather than one that is tied to a single login.
Speed of payout. Cash flow is everything in construction. If your payment provider holds funds for 7-14 days before paying out to your bank account, you have not really improved on the bank transfer model. Look for next-day or same-day settlement. The difference between receiving funds in 1 day versus 7 days can be the difference between making payroll and not.
Audit trail and reporting. Construction projects are audited — sometimes by clients, sometimes by quantity surveyors, sometimes by HMRC. Having a digital record of every payment request sent, every payment received, and every outstanding balance makes compliance and dispute resolution vastly simpler. Look for providers that offer downloadable reports and per-project payment histories.
Dispute handling. The construction industry is inherently disputatious. Snagging lists, defective work claims, and arguments over variations are part of life. Your payment provider should have a clear process for handling chargebacks and disputes, and the evidence from your payment links (timestamps, descriptions, delivery confirmation) should support your position when disputes arise.
Payment links offer construction businesses a genuine step change in how they collect stage payments, deposits, and final invoices. They do not eliminate every payment challenge the industry faces — very large payments may still need bank transfers, and clients on 60-day contractual terms may still be slow — but for the majority of payment interactions between construction companies and their clients, they are faster, cheaper, and more reliable than the status quo.