Guide to Bulk Payments & The Convenience of Payment Aggregation

Have you ever had to pay back a hundred friends at the same time, without an error? It’s a daunting task, yet companies must do it to keep operating efficiently. Whether it’s payroll, contractors, or commissions, when it comes to people’s money, you cannot be late or make mistakes.

While it’s easy to transact one-on-one, continuously paying a high volume requires a method known as bulk payments (also called mass payments, payouts, and batch payments). 

What is a Bulk Payment?

A bulk payment is a bank system that allows a payor to make multiple debit payments to a bulk list, e.g., salary payment. A bulk list is a list of credit accounts or beneficiaries you intend to pay from a single debit account. The transaction shows as a single debit for the total amount of the payment on your bank statement. For a bulk payment, one needs to send money through different ways including:

• Bank transfers (ACH)
• Paypal or other financial institutions
• Credit card and debit card payments (mainly for refunds)

Bulk payment processing leads to faster payments and happier merchants. The most common way to send a bulk payment is with a bank wire transfer. 

This has different names depending on where you are in the world. In the Eurozone, transfers are called SEPA Credit Transfers, in the US they are known as ACH (Automated Clearing House) transactions, and in the UK, they are mainly called Faster Payments or BACS. The advantage of modern bank transfers lies in speed. Payments are virtually instant.

To initiate a bulk transfer, you need a tool that allows you to send a large number of payments simultaneously. This can be achieved with software like an API, file importer, or File Exchange Gateway. Most banks offer these platforms, but it can be hard to get access and many tools have limitations. 

An alternative is to partner with a company that specializes in bulk payments. Using a PayPal account is a great place to start. They offer a bulk payments service with their own API and file importer to facilitate the process.

What’s the Difference Between a Bulk List and a Bulk Payment?

If you are a business that processes a high volume of “on account” or “lay-by” sales, it’s almost impossible to pay off each one individually. It eats up precious time you could be spending on the business. Bulk payments allow you to make multiple individual sales against a single entity in real-time. This enables retailers to pay off a customer’s balance in bulk without having to go through each sale separately. 

Bulk payments cannot be made without a bulk list first. This is a pre-specified list of credit accounts or beneficiaries you intend to pay from a single debit account. There are two types of bulk lists and bulk payments:

Standard Domestic Bulk Payment

This type of transaction allows a business to make a standard domestic remittance to multiple recipients from a single debit account. Standard domestic bulk payments come in a few types depending on your needs:

• Immediate Bulk Payments (IBULK)
• Next-Day Bulk Payments (NBULK)
• Future Dated Bulk Payments (FBULK) 

Bulk Inter Account Transfer (IAT)

An IAT bulk transaction allows you to transfer funds to multiple credit accounts from a single debit account. Bulk Inter Account Transfers are often used to make international payments. It’s a streamlined process that’s not only faster but more reliable and secure than other methods. 

Bulk payments are incredibly useful for financial processes like:

• Salary payment
• Dividends
• Direct debits
• Contractors and freelancers
• Contests

Anytime a group of people are expecting you to pay them at once, bulk payments is a good solution.

What are the Advantages of a Bulk Payment?

There are numerous advantages to sending payments out in bulk. Here are a few to consider:

Speed

There’s no arguing that bulk payments are the fastest way to send money to multiple people. This is especially vital in situations like payroll. Employees depend on their paychecks. They not only need to be accurate, they must be on time. 

Cost-Effective

Bulk payments will cost you a lot less than sending individual payments. Costs can add up when you are processing items one-by-one. 

Payments also cost less when done in batches. You tend to pay less per transaction when you group them. This makes sense since you’ll be paying most employees similar amounts at the same time. It allows for more simplified accounting and cleaner books.

Secure

Bulk payments require sophisticated security protocols. This includes technology like Secured Sockets Layer (SSL). It’s an encryption technique that ensures the data is scrambled the second it is submitted. It cannot be read during processing. 

Simple consistency also adds to security. When making the same bulk payment for payroll each month, it’s much easier to catch mistakes and discrepancies. They stand out. It’s a great means of fraud detection.

Manageability

When paying in bulk, it saves hours of individual sales calculations which facilitates operations and streamlines finances. It’s also a system that can be adapted. Payroll must change with bonuses and raises. Still, it’s a faster means of transacting then doing it by each employee.

Paying in bulk should save a business time, energy, and money. It allows employees to focus on what they are passionate about while helping the organization grow. In modern business, with access to so much technology, the last thing you want to do is waste talent on remedial tasks.

The Future of Bulk Financial Services

Changes in the market and technology are bringing this payment method to the forefront of business. Marketplaces and similar models (think Uber or Airbnb) have complex payment needs that require collecting and sending money in mass amounts. For example, Airbnb collects money from thousands of guests every day. They then have to send it to the hosts. Bulk payments is a payment option that resolves these issues.

A large number of people are working as independent contractors and that number continues to grow. The gig economy requires more frequent payments. Additionally, as technology advances, money can be sent with much faster payments (think instant SEPA in Europe or ACH in the US). This has changed the expectation of payees. People want their money now. With bulk payments, a business can deliver every time.