Choosing the Most Optimal Payment Method for Each Affiliate
Different payment methods work better for different situations. For affiliate payments, especially globally, there is a staggering range of combinations that are optimal for each transaction.
The results of Tipalti’s “Performance Marketing Network Payment Satisfaction Survey” showed that 40% of affiliates felt networks need to improve their payment method options. Payment method choice was important or very important to 88.1% of affiliates. This is consistent with past studies Tipalti has done.
For smaller payments, ACH and PayPal might be desirable for their low fees. For payments to other countries, wire transfers ensure greater deliverability. In some jurisdictions where banking infrastructures are less than ideal, prepaid debit cards and e-wallets may be preferable.
Challenges in Adding Affiliate Payment Methods
The effort to add payment methods becomes a hardship for many affiliate networks. Each method requires a different path for funding the accounts, collecting payment details, understanding payment rules, adding or editing data, and the actual remittance operations. In some cases, individual bank and payment portals are required to interface with the various payment processors. Add this to the general ledger reconciliation complexity after payments are made and it’s no wonder that networks may limit payment methods.
Most Requested Affiliate Payment Methods
|US Affiliates||Global Affiliates|
|94% ACH||56% PayPal|
|53% PayPal||55% Local Bank Transfer (Global ACH)|
|19% Wire Transfer||30% Wire Transfer|
|19% Prepaid Debit||26% Prepaid Debit|
|15% Paper Check||8% Paper Check|
Still, it seems that even for costlier payment methods, such as wire transfers, affiliates are willing to pay. For example, 19% of global affiliates stated they were willing to absorb the cost of a wire transfer.
More Affiliate Payment Method Challenges
In the international payment space, every country has different banking fields to contend with, such as SEPA codes to IFSC codes. If the affiliate has a bank account and can provide bank routing details, global ACH may be considered a viable option.
To add another wrinkle, 93.5% of global affiliates say that being paid in their local currency is important or very important. This is because many banks in different regions charge exorbitant fees for conversions from USD. In many ways, allowing for local currency conversion is like supporting yet another payment method.
Essentially, every affiliate will have unique needs and they likely want the most optimal payment method for them that balances transaction fee cost, reliability, and time to receive funds. If the network pays both US and global affiliates, that’s essentially six or seven points of remittance management to contend with across the network.
For information on the benefits and drawbacks of every payment method, we’ve provided a reference guide available for download here.
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