5 benefits of integrating a mass payout solution

The tech-centric business model has created an entirely new playing field for accounting and payments teams. Best practices relevant just a few years ago no longer deliver the scalability and cost efficiencies required to keep pace with the explosive growth of e-commerce businesses, online marketplaces, and streaming platforms. 

Mass payout software is one such solution that addresses these challenges. By enabling efficient and secure payouts to large numbers of users and partners at a time, businesses use this technology to operate efficiently, protect cost margins, and build strong relationships. 

What are mass payouts (mass payments)?

Mass payouts, mass payments, or batch payments all refer to the same concept: issuing many payments to many partners through one unified process. 

Businesses that regularly distribute mass payments will turn to the SaaS marketplace for a solution that can improve process efficiency, reliably deliver large payout volumes, and plug into existing backend financial systems with ease. 

How do mass payouts provide value? 

As an example, let’s look at 2 distinct tech companies leading their respective categories. YouTube, a global entertainment platform, and Faire, an online marketplace connecting independent retailers with product creators, are both category leaders.

At first glance, these 2 businesses appear to share little in common. But if you dig deeper into their business models, you’ll notice a few conceptual similarities. 

YouTube relies on video creators to create and publish content onto its platform to engage viewers and sell advertisement slots. Faire counts on product creators to fill their digital shelves with premium wholesale items and captures a percentage of the purchase price.

What makes them alike? Each provides the technology to facilitate consumption or purchase. Neither one produces the products they sell or the content they offer. 

Returning to the original point, what does this have to do with payments and accounting? 

Since partners supply core elements of these two businesses’ value propositions, their internal finance teams are responsible for moving a lot of money around. Cash comes in when YouTube sells ad spots or when a retailer makes a purchase on Faire. Then, some of that money flows back out of the business to compensate partners — content and product creators — based on their contractual terms with the institution. 

Keeping partners happy is the name of the game. As such, these businesses must issue accurate, timely partner payments to thousands of different accounts. Often, it makes logistical sense to distribute in as few batches as possible. 

What are the best practices for mass payments under these demanding conditions? The startups and SMBs that aspire to one day lead their respective categories must evolve their mass payout systems to inspire and retain an increasing pool of partners.

Early on, the batch payment system may be cobbled together with a proprietary series of manual and semi-automated process steps. But as the business grows — by adding new partners, evolving payout terms, and operating with overall greater complexity — onboarding a mass payout solution removes common friction points and delivers necessary scalability. 

What features do mass payout platforms offer?

Issuing on-time, accurate payments to hundreds or thousands of partners requires a significant time investment. Mass payout platforms provide features that reduce impact to productivity. 

Additionally, mass payout platforms often surpass the capabilities of manual payment methods by delivering increased precision, flexibility, and security.

When evaluating mass payment platforms, you should ensure they will provide you with the features that will drive the greatest impact, such as:

• API integration into existing financial and accounting systems
• Automated payee onboarding, including tax and compliance checks 
• Accounting reconciliation and tax preparation
• Multiple payout methods
• Currency conversion and multi-currency payments  
• Cloud-based access
• Fraud protection and data encryption

Which businesses use (or should use) mass payout solutions?

Any business that regularly issues payments to a large partner database should be using a mass payout system. 

Such businesses may include: 

• Online marketplaces 
• Content streaming platforms 
• Businesses with affiliate programs
• E-commerce businesses with a variety of suppliers 

5 benefits of mass payout solutions

What benefits can you expect from integrating a mass payout solution into your payments workflow? 

#1 Scalability 

Scalability is the top benefit of working with a mass payout provider. 

Payments are a particularly fussy area of accounting — every detail must be checked, and the stakes are high if you get anything wrong. The automated features embedded in mass payout solutions bypass the frustrating, minute details of payments by leveraging technology to verify and deliver several thousands of payments at a time.  

This is particularly important for growing businesses. Startups and SMBs positioning themselves for acquisition, investment, or an IPO need to prove iron-clad systems are behind their revenue sources. If your marketplace or streaming platform relies on partners, having a high-performing payments system in place will be critical to due diligence. 

#2 Accurate, timely payments

The accounts payable calendar presents an ever-growing to-do list. Missing even just a handful of your payment deadlines can lead to damaged relationships and disgruntled partners. 

Onboarding a mass payout solution allows your accounting team to use their brain power for high-value knowledge work. This approach removes several of the most tedious tasks from their queue — and ought to improve both accuracy and on-time performance of accounts payable. 

#3 Payment and data security 

With data breach incidents on the rise worldwide, businesses with a batch payment program must consider the risks. 

All banking information, sensitive personal data, and payment data must be encrypted to protect partners from fraud and identity theft — and ensure your business complies with applicable laws.  

#4 International reach

If your business counts on partners from other countries, your system ought to offer an option to include them in your batch payments. Some mass payout platforms offer payments in native currencies, currency exchange, and global tax compliance features.

#5 Partner satisfaction

There is no easier way to tell your partners you value them than by paying them on time. 

Consistently keeping your promises builds trust with suppliers — the bedrock of partner-driven marketplaces and platforms. Category leaders, such as YouTube and Faire, leverage trust to build resiliency in their supplier relationships, which leads to a more consistent, valuable experience for the end user.

Mass payments may seem like a small, tactical function of the finance and accounting team. But their impact should not be underestimated. If your business relies on a robust partner ecosystem, keep these ideas in your back pocket as you plan for future expansion.