Payouts are outgoing transactions from a merchant to its customers, suppliers, service providers, business partners, and so on. For all businesses big and small, payouts are as important as pay-ins. Users expect to get their funds at the same speed that merchants charge them. Therefore, merchants need more than one payout solution to cover their diverse needs, to gain loyalty, trust and satisfaction from customers.
The market has created a range of direct payout services that provide speedy and secure payment journeys for outgoing funds. The wide range of services is necessary to cover all the diverse needs of businesses from iGaming to retail, travel to marketplaces.
Leading payout services
- Mastercard Send
Mastercard Send enables payouts to be sent directly to Mastercard-brand cards worldwide. It settles transactions in minutes and doesn’t require that the payer share details – they only need to know the card number of the payee. Automatic reconciliation also saves on accountancy outgoings. Very popular for a wide range of business applications. It can be used for eCommerce, insurance claims, merchant settlements, and more.
- Visa Direct
Visa Direct enables users to send payments to all Visa-brand cards around the globe. As with other payout services, settlement is direct and rapid without the need to share payment details. Easy payouts are a big advantage for online marketplaces, because they help convert customers into sellers, enriching the business ecosystem. Very popular for a wide range of business applications including online marketplaces, retail and iGaming.
This US-based network connects the nation’s banks and enables direct transfers from account to account, bypassing the need for credit card networks. Businesses and institutions use ACH to pay out paychecks, tax refunds, annuity payments, and even government benefits. Popular for iGaming winnings, bill payments and more.
- SEPA Payments
SEPA is a network connecting banks and financial institutions in the Single Euro Payments Area, enabling inexpensive direct payouts between bank accounts. Transfers are actioned within a guaranteed time. It allows Europeans to receive payouts directly to their bank accounts. They also benefit from using their debit cards anywhere in the euro area, cross-border direct debits, and not needing to use a credit cards while traveling. It’s a popular solution in places where credit card penetration is low, such as Germany and the Netherlands.
eWallets enable users to store and send money online, providing an alternative to bank account transfer, although they can often be linked to a bank account if required. There are many brands of eWallets throughout the world and features can differ, but they all facilitate money transfers directly from wallet to wallet. For customers, they offer more security because eWallets don’t usually share payment details with merchants, while businesses benefit from near real-time payouts with inexpensive processing costs. They are used for peer to peer transfers, online shopping, iGaming, and more. At Nuvei, we are constantly adding new eWallets to our global portfolio of APMs as we know that the variety of APMs that enable payouts is as important as the pay-in methods. PayPal, Skrill, Neteller, ecoPayz, Much Better and Pay4Fun are popular alternative methods that enable payouts.
Interac is a network of Canadian banks and financial institutions that enables money transfers between accounts. Individual users can receive money via electronic transfer and make online payments directly from their bank accounts, eliminating the need to share personal data with the merchant. It’s a popular solution for eCommerce, money transfers, rent payments, and more.
- Instant bank transfer
While regular bank transfer usually takes a few days, this one takes 30 minutes only. The instant bank transfer system is connected to all the banks in a specific country and enables merchants to transfer money quickly to all their users at all participating banks.
Additional needs covered by payouts
Online marketplaces, which account for 47 percent of all online purchases, live on multidirectional payment flows. A good payout system allows a marketplace to reimburse its sellers quickly, and this is something that sellers look for before joining a marketplace. So payouts are not only vital to the day-to-day functioning of these networks, but also their growth.
Research shows that consumers consider online data security to be as important as convenience, but inconvenient challenge flows can still lead to abandoned shopping carts. Payouts solve this issue by giving customers a greater sense of control; they don’t need to enter bank account details into an online form. This enhanced feeling of security improves the user checkout experience and can drive higher conversions.
The ability to pay employees quickly is a big advantage in a labor market tending towards freelancers and short-term contracts. Research carried out by Mastercard in the US found that the gig economy is worth approximately 1.4 trillion USD in that country. Immediate payouts are thus a way to improve employee satisfaction and retention. For example, Visa research found that more than half of Uber’s drivers choose to pay a 50-cent fee and receive their money immediately.
People who need to borrow money are often, by definition, not in a position to wait for a week for the cash to clear. The ability to make liquidity available immediately is a significant selling point in this line of business. Several payouts services can answer the need of lending.
For many of the aforementioned use cases, legacy payout services, with their relatively slow settlement times, are not sufficient. That’s why Nuvei’s Payout Suite is integrated with all of the payout methods noted above and more, and all are available via a single integration (API). Like all of our business-optimizing products, our payout suite is fully localizable and currency and acquirer-agnostic, offering complete flexibility but more importantly – speedy and with no friction.
As the head of product at Nuvei, my team and I put a lot of time and effort in researching the most updated payout technology globally and integrating it into the Nuvei payment system. We understand that it is a crucial part for many online businesses today. Do you need payouts solution for your online business? Contact me directly via LinkedIn, and I’ll be happy to answer your questions.