Companies have expenses to pay. "Paying the bills" may not seem interesting or new. But newer innovations make payments faster, cheaper, safer and more convenient.
The innovations are likely to help your business if it relies on (or suffers from) any of the following.
- You trust paper checks to pay employees, subcontractors, partners, or suppliers.
- Bank-to-bank payments and transfers take a long time, resulting in reduced customer and partner satisfaction.
- Partners and suppliers demand faster payments.
- You have become a victim of check fraud or have extra costs for sending paper checks again.
- Fees for domestic and international bank transfers have increased.
- Your accounting, settlement and reconciliation processes are complicated and time-consuming.
- Customers, subcontractors and employees use online banking.
- Your company involves repayments or payments, such as cashback loyalty programs or insurance.
Marketplaces and subsidiaries. Running an e-commerce market or affiliate program means that you, as the owner, will pay commissions and fees (or deduct commissions and fees) from the proceeds of a sale. Traditionally, sellers and subsidiaries have received money via check, bank transfers or sometimes via PayPal. And the process of calculating, regulating and reconciling payments can be confusing.
No longer. New payment technology providers allow the affiliate manager or market operator to pay in near real time without additional banking or payment procedures.
When a sale is completed, the technology deducts and immediately sends the proceeds directly to the partner. There is no additional accounting or check writing.
Subcontracting suppliers ~~ POS = HEADCOMP for example, delivery managers and temporary employees are traditionally paid by check or bank transfer. There are now more options. Many suppliers accept (or prefer) non-banking methods. The supplier gets paid faster and the buyer avoids substantial transfer fees.
For example, Visa Direct allows companies to transfer money directly to a subcontractor's Visa account – avoiding checks and bank transfers. And PayPal payments are common for offshore subcontractors such as programmers and writers.
Employees. Modern payment technology enables companies to pay employees in ways that avoid checks or bank transfers. Employees can get their funds quickly and safely.
Payouts. A company that provides payments (for example, insurance companies) can use modern payment technology to quickly distribute funds to its customers with increased convenience for everyone. Instead of waiting for a check, customers can get money directly into a Visa or PayPal account.
Cash-back, discounts and loyalty programs. Some of the new technologies can help with cash-back loyalty programs because payments are displayed in customers' accounts quickly without further effort, which ironically increases loyalty.
As an example, here are three suppliers at the forefront when it comes to payment innovation.
Visa Direct is available to payment processors who can then offer it to merchants. With Visa Direct, merchants can drive money to Visa credit and debit accounts, for example to entrepreneurs. Merchants pay a small fee for the service, but it is generally less than the cost of writing and managing paper checks.
PayPal MassPay API facilitates calculation, automation and scheduling of payments to a list of recipients. Fees apply as always, but the cost of traditional bank-to-bank payments and transfers is generally much higher.
Stripe Connect, another API, is useful for sharing revenue from a single transaction between multiple recipients. You probably need an experienced developer to implement. But once it's up and running, Stripe Connect is an effective way to distribute commissions and fees to, for example, several market players.