Smart contract-based automation for predictable B2B settlements among Maltese SMEs

Abstract

Delayed B2B payment settlement is a persistent challenge for small and medium-sized enterprises, with over 60% of European businesses reporting late payment in 2023. Much of this problem is procedural in nature, arising from manual invoice verification, approval bottlenecks and reconciliation delays that workflow automation could address. This study assesses the feasibility of smart contract-based B2B invoice settlement automation for Maltese SMEs, focusing on process impact, MDIA governance alignment and realistic assurance approaches for resource limited organisations. A Design Science Research methodology was adopted. A minimal Invoice-Acceptance-Payment smart contract prototype was developed in Solidity and deployed on a local Ethereum test network. The prototype’s business and technical scenario was evaluated by nine Maltese stakeholders across four professional groups through semi-structured questionnaires, analysed using thematic analysis with a hybrid deductive-inductive coding approach. Smart contract-based invoice settlement automation is technically achievable at proof-of-concept level, but adoption feasibility is conditional on organisational, governance and legal preconditions not yet fully in place in the Maltese context. The prototype effectively reduces procedural delays where invoicing relationships are direct, digital and credit-based. However, adoption requires business model compatibility, buyer participation willingness, governance additions to satisfy MDIA intervention capability requirements, and formal legal enforceability of smart contract obligations under Maltese law. The study draws a distinction between procedural delays, which automation can address, and behavioural delays arising from deliberate non-payment, which require legislative rather than technical solutions. The primary barriers to adoption are organisational and structural rather than technical, and widespread deployment will require coordinated policy, legislative and commercial preconditions to be established.