Does Your Business Need A Mass Payout API?

Mass payout APIs can make life much easier for your teams and help keep your suppliers and partners happy. But does your business need one? Read on as we explore this topic in more detail.

Understanding mass payout APIs

Before we get into the benefits of a mass payout API, let's look at what this digital technology is and how it works. 

What is an API?

API stands for application programming interface. This is how two applications communicate with one another, drawing data from one software to the other via the API connection. The API only allows specially defined datasets to pass between applications, and specific permissions are required to complete the secure connection.

This technology has essentially revolutionized how two software works together. Nowadays, the software can communicate effectively, integrating to achieve comprehensive functionality for the end user. Thanks to APIs, customers can access various data points and features all in one place, streamlining the whole experience.

That said, APIs are great for developers too. Resource and labor intensity is significantly reduced, and the potential for human error is almost eliminated. Databases are kept updated on each side of the connection, and data management is handled automatically. All of this is achieved without ever jeopardizing the security and usability of the systems involved.

What are Mass payouts?

Businesses often need to provide payments to various individuals and entities. An organization may need to deliver a refund to a customer as part of a returns policy. Alternatively, they may need to pay a supplier for materials received, a strategic partner for services rendered, or a contractor for infrastructure repair and refurbishment. Tax payments, licensing fees, and a wealth of other charges and costs are all part and parcel of running a business.

As businesses grow in size and complexity, the volume of payments increases too. A growing business may find itself paying out sums to many different entities regularly, maybe multiple times each month or even each week. All of these entities will have separate bank accounts, and payments need to be made to the correct bank account without fail — some entities may even have multiple bank accounts, which they use for different types of payment. These multiple payouts made simultaneously would be classed as mass payouts.

Often, these mass payouts can get seriously complicated. Businesses may make payments to entities in locations worldwide, combining domestic and international transactions into the mass payout mix. They may need to work with different preferred payment methods for each payee and factor different currencies into the batch of transactions.

What is a payment API?

A payment API is an application processing interface designed to solve this problem. Payment transfers are made across secure APIs and are automatically assigned to the appropriate recipient.

The parameters of the transaction are pre-programmed so that everyone involved can rest assured that the right funds will be delivered to the right bank account and in the right configuration.

The idea is to save businesses huge amounts of difficulty and stress. What would previously have been a complex and time-consuming task is executed with ease and in real time, thanks to the mass payout API.

As businesses grow complex over time, mass payout APIs are getting increasingly valuable. The benefits are seen at both ends of the transaction — the payer can pay bills and settle other transactions, while the fund recipients are not left waiting for delayed or missing payments.

Why mass payout APIs are good for businesses

What benefits does a mass payment API provide businesses? While large-scale and highly complex transactions are certainly made easier by deploying an API, what specific advantages does this approach offer? Let's take a look.

Payments are made without delay

Delayed payments are always bad news. Once payments get delayed, all parties begin to suffer, as accounts fall behind schedule, cash flow is reduced, and it becomes difficult to plan for future expenses and budgets.

There is no danger of this with a mass payout API. The transaction is executed automatically, without fail, on the specified date. As long as there is enough money in the sending account to service the full value of the transaction, there is no danger of failure. As such, keeping on top of payment management becomes much easier.

There is no risk of error

If money is sent by mistake — perhaps to the wrong account or via the wrong payment method — this will be a problem. Money sent to the wrong account can be difficult to trace and retrieve and may have to be written off as a loss.

Funds sent via the wrong payment method or with other errors can make life difficult for both the payer and recipient. If this happens regularly, ongoing financial management becomes challenging.

What the mass payment API does is essentially remove the risk of error altogether. Provided that the information associated with the transaction is correct, the API will execute the payment without a problem.

Businesses can scale effortlessly 

Handling mass payouts manually can make it difficult for businesses to scale. As businesses grow, their regular payment schedule becomes complex, making it also hard for personnel to deal with this. The risk of error increases, and businesses must find effective ways to overcome this obstacle.

Mass payout APIs are the perfect solution here. Businesses can scale effortlessly without worrying about outgrowing their payment solutions. New payments can be added simply by updating the API. Even the API handles the most complex payment landscapes with ease and reliability.

Data stores remain up to date

APIs help applications communicate with one another. Communication, of course, means a transfer of data from one software to another. This is a major benefit of the mass payout API.

Real-time communication ensures that data stores are also updated in real-time. You won't have to worry about working with out-of-date information or falling behind on record keeping because this is handled automatically.

Relationships with partners are improved

Partners don't want to be paid late. Suppliers and contractors don't want to be left wondering when their last invoice will be processed. Instead, they want to be paid on time, just in the same way that you and your business expect to be paid on time in the event that anyone owes you money.

Implementing a mass payout API ensures this. This provides a strong platform for the growth of mutually beneficial relationships, as there are no delays and no parties are left frustrated with payment schedules.

APIs integrate with existing solution

APIs are designed to make integration easy. The mass payout API is no exception, and this piece of code will integrate with payment gateway applications, currency conversion solutions, and accounting software, providing a seamless experience for all users.

This makes mass payout APIs valuable solutions within your digital financial infrastructure. Your personnel doesn't want to spend time moving between different applications and solutions, and transferring data between software may constitute a security risk. None of this is necessary when the right APIs are deployed.

Mass payout API's: Does your business really need one?

What we've looked at so far certainly makes mass payout APIs seem like great assets for your business, and this is certainly true. They unlock a wealth of different benefits, but just because something can be beneficial doesn't always mean it is necessary. So, does your business really need this API?

Mass payout APIs are worth investing in if the following apply to your business.

• Your current payment systems are giving you problems, and you are finding it difficult to manage labor hours, expenses, and resources
• Your payment setup is getting increasingly complicated, and you are concerned that your current methods are not keeping pace with this growth
• Your partners have experienced frustration due to missed or delayed payments
• Your employees are experiencing difficulties when managing financial data and overseeing transactions
• You are pursuing a digital transformation strategy, and you want to implement reliable, fast digital processes across the board

Essentially, it boils down to this: If you believe you can keep handling mass payouts in the way you always have, with no foreseeable problems, you don’t need to invest in a mass payout API. However, if your current methods are under strain, it may be time to integrate an API into your payment system.

Get started with mass payouts

If you're looking to learn more on how to send mass payouts with Runa, schedule a demo of our platform today.