How to improve instant payouts

In our fast-paced, on-demand digital era, the expectations of consumers and businesses have changed. Instant payouts meet those changing expectations by allowing funds to be sent and received instantly, avoiding the time lag associated with traditional payments.

From gambling institutions to gig platforms, many organizations are finding that instant payouts can help to improve customer experience and boost loyalty. 

In this article, we explain instant payouts, their role in the wider payments ecosystem, and give you our top tips for improving instant payouts in your business.

What are instant payouts?

Instant payouts allow recipients to access their funds as soon as a transaction has been completed, rather than having to wait hours, or even days, for them to be made available. The process is typically conducted through a single API and involves the linking of bank accounts, payment cards, or digital wallets, which facilitates quick and seamless transfers. 

‍Instant payouts can offer businesses a much more convenient and efficient method of making payments, helping to build trust with customers and help all parties manage cash flow more effectively. 

Instant payouts are commonly used in the gambling and loan industries, which rely on giving customers immediate access to winnings and funds; and in financial sectors where transactions are time-sensitive, like trading. They can also be used by businesses to disburse wages to employees and to pay gig workers. 

You should be aware that the fees, limitations, processes and availability of instant payouts can vary depending on the payment service provider (PSP) or financial institution involved, as well as the region you operate in. For example, not all countries have the necessary infrastructure in place to facilitate instant payouts.

Bank payouts

Instant bank payouts are transfers between bank accounts that ensure funds that are debited from the sender’s account are instantly credited to the recipient’s account. Businesses can payout to customers and other businesses around the world using local clearing methods, while compliance screening helps to prevent financial crime and manage risk. Bank payouts are especially useful for larger sums and B2B transactions. 

Card payouts

Instant card payouts enable businesses to securely transfer cash to their customer’s cards within minutes. This can be done at any time of day and on any day of the year. Using a single API, you can unlock transfers to billions of customer cards around the world without needing new integrations for every region. Card payouts are especially useful for P2P payments and for sending money abroad when the recipient doesn’t have a local bank account. 

Read more: Mass Payouts

How to improve instant payouts

The aim of instant payouts is to deliver maximum convenience for businesses and consumers, while remaining secure and compliant. Follow these steps to ensure your instant payouts are fully optimized: 

• Utilize real-time payment networks - real-time payments (RTP) networks allow you to send and receive funds instantaneously, 24/365. Many countries now offer their own RTP rails, including the US, the UK, China, and India. Provided you meet the eligibility criteria, you can take advantage of your local RTP to deliver instant payouts
• Optimize your technology structure - instant payouts rely on the successful interoperability of a number of different technologies. You should ensure the systems you have in place are highly compatible and optimized to ensure speed and efficiency and to minimize delays. Too many businesses still rely on complex, siloed tech systems and manual processes that hamper growth and damage customer experience. By conducting payouts through a single API, you can optimize performance and expand into new regions without the need for new integrations
• Implement fraud prevention - the first step in a successful instant payout is ensuring the transaction is accepted in the first place, and for that, you need a robust fraud detection system. These systems use machine learning and flexible rules to identify and prevent fraud while approving a higher number of legitimate transactions. 
• Offer multiple payout options - as merchants scale, they encounter new challenges, local differences and customer preferences, and there’s no one-size-fits-all option for every payout. A contractor on assignment in another country will have different needs to a business that needs to send large sums to another business. That’s why, so that you can be responsive to different scenarios and keep your customers happy, you need to offer a range of payout options, from payouts to local bank accounts to direct transfers to Visa and Mastercard cards 
• Use verification processes - instant payouts are a compelling prospect for criminals: the quicker they can move money between accounts, the less time there is to scrutinize suspicious transactions. That’s why it’s so important for businesses to implement robust verification processes, which confirm the identity of anyone using your service to combat fraud and mitigate the level of risk they’re exposed to
• Offer transparent communication - transparency is key to offering a great customer experience, especially when it comes to cross-border payments, where hidden costs in the form of currency conversion fees and local taxes often mean the recipient ends up with less than they expected. Many of these costs can’t be avoided, but by being open about all costs and FX rates, and allowing payees to track the journey of their funds with real-time status updates, you avoid nasty surprises and build trust with your customers
• Monitor and analyze performance - using data-enabled tools and insights to monitor your payout performance will allow you to continually improve your offering. Make the most of real-time transaction data to identify errors, reduce exceptions and increase acceptance
• Stay compliant with regulations - finally, to ensure payout success, you need to stay on top of the constantly evolving global regulatory landscape. Find a solution that can help you meet your compliance requirements by, for example, screening payouts against global sanctions and anti-money laundering rules so that you can increase acceptance while managing risk

Improving your payouts with Checkout.com

Checkout.com can help you facilitate instant bank payouts within Europe and the UK, and instant card payouts to more than 174 countries. 

Using our payout solution, you can unlock global growth from a single API, with no need for additional integrations. Leverage our deep local knowledge and payout tools to navigate new markets with ease. What’s more, compliance management is built-in, so you can scale with confidence while successfully managing risk. 

And with our data-enabled tools and real-time transaction data, you’re empowered to continually optimize performance. 

Find out more about payouts with Checkout.com.