Payout is a key process for digital businesses. We will show you what payouts are, as well as all the advantages of having a payout solution and what you must know before choosing one.
Payout is basically the act of paying a payee. A payee can be a contractor (suppliers, partners, gig-workers, etc.). These payments can be done by bank transfers, online, in person, by phone, by cash, credit, etc. However, there are companies that face some challenges in paying their contractors and having their payout process in place.
Sometimes a contractor is in a different country and has a different local currency. More so, there are businesses, such as e-commerces, that need to pay their sellers when a shopper buys on their platforms. So, relying on manual entries can be very risky. Payments may be missed and reconciliation can go wrong if manual processes are in place. Besides being more prone to errors, it can be very time consuming, and this is why there exist payout solutions.
Suppliers, partners, and any kind of contractor usually wants to be paid as soon as possible after performing their services. Let’s take Uber’s example. According to a Visa research, more than half of Uber’s drivers prefer paying a 50-cent fee to receive their funds immediately. In regards to e-commerces, local sellers inside the platforms want to be paid as soon as they sell something. Thus, quick and efficient payouts are something that vendors look for before joining a marketplace platform.
As you can see, you must care about your payout experience and consequently look for the best practices to put your process in place. A payout solution is basically a financial platform that processes payments and there are many options in the market.
From retail marketplaces to gaming and travel industries, payout solutions work for all segments of digital business. They help them to gain loyalty, trust and satisfaction from their partners, suppliers and stakeholders in general. Furthermore, when dealing with a large number of contractors, a business must perform what is called mass payout. This is a very handy method which automates the payment process to pay all payees simultaneously and online.
What you must know before choosing a payout solution
Choosing a payout solution can be tricky. With so many options available, you must make the right questions to avoid bad surprises. So, to make it easier for you, we have picked the most important ones:
- Does it fit your business model?
- What is the payment processing speed?
- How is the payee onboarding process?
- How many payment methods are available?
- It works for paying your payees in their location and currency?
- Does it need an API or it is a ready to use platform?
- Does it have localized customer support?
You have now seen how crucial a payout solution any digital business. There are specificities that need to be taken into consideration. Hence, especially in regards to Latin America, you must look for a native partner that has a real local knowledge about payout processes in the region.
EBANX Payout solution fits any kind of business or operational model and offers a seamless experience. The solution covers several countries in Latin America in which your contractors may be located, while also allowing you to pay them in different currencies and the payment method of their preference.