With the cross-border payments market forecasted to reach $320 trillion by 2032, an increasing number of companies are now relying on online payment methods and electronic invoices.
International payments should be simple; send money from point A to point B, and be done with it. However, in practice, they’re anything but straightforward.
Many companies find themselves struggling with high fees, slow processing times, and foreign exchange (FX) risks that make the whole process more complicated than it needs to be.
With an increasing need for efficient payment solutions for bulk international transactions, batch payment technology has become a godsend.
Batch payments let businesses send thousands of payments at once in just a few clicks. This method is ideal when handling recurring international transactions such as salaries, vendor payments or utility bills.
Batch payments can lower costs, reduce manual work and improve cash flow management as they are systematically processed in groups. Plus, sending payments in batches can help control FX risk by streamlining international transactions.
Let’s walk through how batch payments work, their benefits and how to choose the right solution for your business.
Table of contents
- A guide on batch payments
- How do batch payments work
- Benefits of using batch payments
- How to choose the right batch payment processor
- Batch payments FAQs
A guide on batch payments
The term ‘batch payment’ itself is pretty self-explanatory: instead of sending payments one by one, you group them in batches and send them all at the same time, which can be effective in cutting down on your business costs.
Manually processing dozens of payments can drown your team in manual work. Batch payment systems can solve this by handling all transactions at once in a single upload.
Let’s say it’s the end of the month and you need to cover five vendor invoices, distribute commissions to six partners and pay five freelancers across three countries in their respective currencies.
With traditional payment methods, this could be 16 transactions, each with different bank processing delays and international payment costs. With batch payments, you could send all 16 payments at once without much delay.
How do batch payments work?
Here is a breakdown of how batch payments work.
1. Collect payment data
Collect data, such as invoices, bills, account details and preferred payment methods, in spreadsheets.
2. Upload the batch
Send your payment data to your payment processor, or if you are using Privalgo, upload the spreadsheets through our client platform.
3. Verification
Your payment processor sends the payment data to the issuing bank to make sure the transactions are accurate and to verify if you have sufficient funds before approving the payments. Once approved, the transaction amounts will be placed on hold, and the details of each payment will be saved for later processing.
4. Payments are sent
The saved requests are sent as a batch to your payment processor, which will categorise the requests before sending out the payments.
The funds from your account reach the receiver’s account, which usually takes one business day if your time of submission meets the cut-off time.
5. Download payment reports
Access and download the records of all your previous payments, collections and payment errors through your payment processor for easy auditing.
You can automate the entire process of sending payments once you have a proper schedule for processing recurring payments.
Benefits of using batch payments
Using batch payments can save you a lot of time and stress.
1. Reduced manual work
Batch payments cut down the need for repeated manual entries, as you send multiple payments in one go. You don’t have to go back and forth between software, as the client platform is all you need. Batch payments save time for your accounting team and lower the risk of human errors.
2. Lower costs
Batch payment systems are designed to offer a quick and easy solution, so you can cut down on labour costs. Scheduling batch payments during off-peak hours can also help avoid higher processing fees associated with real-time systems.
3. Improved accuracy
Fewer manual inputs mean less room for human error, such as duplicate payments or incorrect entry of amounts. Automated batch payments also verify the payment information before submission.
4. Faster payouts
Once a batch is processed, your money reaches your employees, vendors or partners quickly, ensuring smooth operations.
5. Predictable cash flow
With scheduled batch payments, you can track your cash flow better. This predictability helps avoid overdrafts or missed payment deadlines.
6. Simplified record-keeping
Batch payments consolidate multiple payments into a single transaction, making it easier to maintain records at the end of a period. This reduces the complexity of your account-closing processes.
7. Scalability
Batch payment systems are built to handle growing transaction volumes without increasing the costs. As you scale your business, batch payments ensure that your operations remain efficient and manageable.
8. Increased security and control
Batch payment systems include features like two-factor authentication and audit trails, which enhance payment security. Scheduled processing and built-in controls reduce the risk of unauthorised transactions.
How to choose the right batch payment processor
Batch payments can help your finance team work faster and smarter. The right system will save you time, reduce errors and keep your vendors, employees and partners happy.
So, here’s what you should look for when choosing the right batch payment processor for your company.
1. Compatibility with other tools
Make sure the system connects with different software you already use, such as your accounting software or payroll. That way, you don’t have to constantly switch between tools or copy & paste data.
2. Payment methods
Some processors only support one payment method, like ACH. Choose a processor that can handle all types of payment methods, like cards, wires and international payments, so that you can pay different types of people, like vendors, freelancers and partners.
Your payment processor should have the necessary tools to schedule or repeat payments, along with options for 1099 payments, refunds or reimbursements.
3. Approval process
As your business grows, you need to have certain rules in place so that the right people can approve payments. The ideal batch payment processor must show you a clear record of who approved what. This can keep things organised and prevent mistakes.
4. Cross-border payment function
If you pay international employees or vendors, you’ll need a processor that can handle the currencies of countries where you’re sending money. The processor must comply with regional tax rules and show you the FX spread on each transaction.
5. Support
Before signing up for anything, speak to a specialist about your company’s needs to find out if it’s a fit and see how helpful the support team is.
The right batch payment processor will make your job easier. Look for one that fits your workflow, handles your preferred payment types and keeps everything running smoothly.
In short, making a batch payment is a smart upgrade for your business’s financial operations.
By grouping payments, you can reduce human error, predict your business’s cash flow, and free up your team to focus on more important tasks, like scaling your business.
As your business scales, choosing the best batch payment system will help you streamline operations and boost your business growth.
At Privalgo, our client platform makes batch payments easy, giving you the efficiency you need today, while being versatile enough to scale for tomorrow.
Contact us today to learn more about how our batch payment technology can help your business scale further, faster.
Batch payments FAQs
Here are some of the most frequently asked questions about batch payments.
Can batch payments be used internationally?
Yes, batch payments can be used internationally, which makes it easy for businesses with cross-border operations to handle payrolls in different currencies or pay vendors in multiple countries at once.
Are batch payments secure?
Yes, batch payments are secure as they are processed with strong security measures, like multi-layered logins and two-factor authentication.
Are batch payments good for small businesses?
Absolutely! Small businesses can benefit from batch payments, too. The cost is usually low, and it saves time, allowing you to handle multiple payments in one go.
How long does a batch payment take?
A batch payment is usually processed immediately upon receipt, however, the receiving time depends on the type of payment, cut-off time and currencies involved. In most cases, the payment will be sent on the same day if you meet the cut-off time.
Can I schedule batch payments in advance?
Yes, you can schedule batch payments ahead of time. This helps you automate recurring payments, ensuring everyone gets paid on time.
