The construction industry in Malaysia continues to face challenges in ensuring timely payments under conventional contract arrangements, often resulting in project delays, financial strain, and disputes. This study proposes a strategic framework for integrating Smart Contracts and Building Information Modeling (BIM) to enhance payment processes within Malaysian conventional construction projects. Smart Contracts, as blockchain-based self-executing agreements, and BIM, a digital representation of physical and functional project characteristics, collectively offer transformative potential in automating and securing payment mechanisms. This paper examines current issues related to delayed and disputed progress payments, explores technological advancements within Industry 4.0 and 5.0. The integration emphasizes the role of Smart Contracts and BIM in improving transparency, minimizing human error, and ensuring real-time milestone verification. Through qualitative document analysis, the research illustrates how the integration of these technologies can streamline progress payment claims and address the inefficiencies embedded in Malaysia’s conventional procurement systems. The findings advocate for digital transformation in public sector contract administration, with implications for policy, project governance, and industry-wide adoption of smart contract systems.