Changing the payment culture in construction.

Learning Points

1. Why is payment culture in construction causing widespread insolvency and harm?

The construction industry suffers from a broken payment culture where funds flow sequentially through multiple tiers, often delayed or withheld. This creates cash flow issues, especially for subcontractors, leading to high insolvency rates—the highest of any sector. When a contractor fails, it can wipe out months of payments, triggering a domino effect of business failures. These financial pressures extend beyond business, affecting families and mental health, even contributing to suicides. The system incentivizes holding onto others’ money, creating mistrust and inefficiency. No one would design it this way today, yet it persists, harming thousands of small businesses and individuals.

2. How does Sable’s digital payment system protect funds and businesses?

Sable’s Digital Parallel Payment Account (DiPPA) creates a dedicated, ring-fenced bank account for each project, protected by a legal trust. This ensures that project funds cannot be misused or lost to insolvency. Payments are authorized through the Sable app, using dual verification—both payer and payee must approve, with biometric authentication. This system prevents funds from flowing through intermediary accounts, eliminating the risk of money being held or diverted. Even if a contractor or client goes bust, the funds remain secure and available for the supply chain. It’s a fintech-driven solution designed to bring transparency, security, and fairness to construction payments.

3. Can simultaneous payments across tiers reduce disputes and improve trust?

Yes. Sable’s system enables parallel payments across all tiers of the supply chain, meaning everyone gets paid at the same time. This removes the incentive for upper tiers to delay payments and eliminates the leverage they often hold over subcontractors. Since each party’s payment is contingent on the next tier being paid, it fosters collaboration and mutual accountability. Disputes are minimized because both parties must agree on payment amounts before funds are released. If disagreements arise, partial payments can still proceed, and disputes can be resolved later. This structure builds trust, reduces conflict, and ensures smoother project delivery.

4. Will public and private sectors adopt this system for better accountability?

Adoption is already underway. In the private sector, several specialist lenders have mandated Sable’s system as a condition of finance, recognizing its value in protecting funds and improving governance. In the public sector, following major insolvencies, the UK Cabinet Office and other agencies have engaged with Sable. The Environment Agency is piloting the system, and NHS trusts are exploring its use. The system aligns with new procurement rules requiring 30-day payment terms and supports ESG goals. Both sectors see its potential to reduce risk, improve transparency, and ensure fair treatment of suppliers, making widespread adoption increasingly likely.

5. Does this solution support ESG goals while reducing overall project costs?

Absolutely. Sable’s system supports ESG (Environmental, Social, Governance) goals by improving governance through full audit trails and secure, traceable payments. Socially, it protects small businesses—over 99% of the construction sector—by ensuring timely payments, reducing financial stress, and supporting mental health. Economically, it reduces inefficiencies and disputes, with estimated savings of 3.8–5.2% of project costs. Some suppliers are already offering discounts for using the system due to reduced credit risk. It also enables reporting on local economic impact, helping clients demonstrate social value. For investors and lenders, it offers a compelling combination of ethical impact and financial efficiency.