As more and more Africans move to other countries for greener pastures, there has been a significant increase in the number of remittances African countries receive. This is a great development because remittances have been shown to greatly impact economic growth. In essence, the higher the remittance amount, the higher the likelihood of economic development.
In the same sense, there are many businesses abroad whose workforce is primarily located in Africa. Thanks to the advent of technology, many of these businesses can now process employees’ salaries as batch payments. These batch payments can in a way qualify as remittances.
As a result of these developments, innovators and entrepreneurs are reshaping the African payment landscape. Many startup companies focus more on providing payment solutions for businesses and consumers. In fact, the electronic payment industry is attracting more investment than any other financial services-related sector.
In this post, we’ll walk you through the concept of effective batch payments and how it may be the future of African remittance. Stay with us.
What is Batch Payment?
As the name implies, a batch payment involves paying multiple recipients at once through a single bank account in a single payment. Batch payments are typically more acceptable because they’re more efficient than making lots of separate payments. This is especially useful for global businesses that need to perform numerous cross-border transactions. Some of these transactions include payroll, payment of supplier bills, and international payments.
When using batch payments, you can send the money in either of the following ways:
- Bank Transfers (ACH)
- Credit card and Debit card payments
- Cross-border payment institutions like Changera
How Does Batch Payment Processing Work?
During batch payment processing, attempted card transactions go through the general process of authorization, processing, and settlement. However, regardless of when the initial payment was made, the transaction will only move from the authorization to the settlement stage at the end of a given period. This is different from real-time processing which usually requires more time and work.
To understand how batch payment works, you need to understand what happens during each phase. Let’s take a look at some of the major phases involved:
Authorization:
This is the first step of batch payment processing. At this stage, you send out authorization requests for outbound payouts. These requests are encrypted and sent to the issuing bank through your payment gateway. This ensures that the transaction is legitimate and that you have enough funds to make the payments. Once authorization is successful, a hold for the transaction amount will be placed on your bank account. Thereafter, you’ll save the details of each payment for later processing.
Processing:
This occurs at the end of the business day. Saved requests are sent as a single batch file to your payment processor which categorizes each transaction. Then, the transactions are sent on for settlement.
Settlement:
This is the final stage of the batch payment processing pathway. It is at this point that the issuing bank moves the funds that have been on hold from your merchant account to the designated accounts. This process usually takes between 1-3 days.
What are the Advantages of Batch Payment Processing?
There’s no doubt that batch payment processing is a lifesaver for many business owners. Here are some of the benefits of batch payments:
Flexibility:
Batch payment processing can be automatic or manual. This gives you the flexibility to conduct them whenever it’s convenient for your business. Likewise, you can also automate them to happen at a specific time every day. Changera Business provides automated payment processing capabilities. Once the batch payment is created, the system can automatically execute the payments, eliminating the need for manual intervention and saving valuable time for businesses.
Time-Saving:
Settling payments in bulk is way more time-efficient than separating real-time payments. Instead of processing individual payments, businesses can combine them into a single file or data set. Consequently, this will reduce the time and effort required for payment processing.
Easier to Review:
Generally, when using batch payments, you process transactions at the end of the day. This makes it easier to identify and deal with any issues that may arise.
Lower transaction costs:
You save money when you pay fees per batch rather than per transaction, thereby making batch payment processing a much more cost-effective payment system. Also, the streamlined process eliminates the need for manual labor, reduces errors, and minimizes administrative overhead, resulting in cost savings for businesses.
Great for International Businesses
If you have a global business, then batch payments are perfect for your payment needs. Batch payments allow you to pay out to multiple countries in different currencies simultaneously.
Effective Batch Payments: The Future of African Remittance
We cannot overlook the benefits of batch payments for global businesses. However, it is necessary to keep in mind that these benefits are not only available to businesses. An effective batch payment system will significantly change the future of remittances in Africa. As more people embrace the idea of e-payment systems, there will be a significant rise in the amount of remittances across Africa.
Embrace seamless cash flow and improve your operational efficiency by implementing effective batch payments with Changera. Changera Business is a financial technology company that offers solutions to streamline and simplify batch payments for businesses. With Changera’s innovative tools and systems, it is now possible to make managing multiple payments more efficient and convenient.
Find out more about Changera Business by downloading the Changera mobile app on the Google Play Store or App Store.
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