Choosing the Right Payout Methods For Your Payees – Hyperwallet Payouts (2024)

TL;DR This guide will walk you through the 5 most important considerations in choosing the right payout methods for your payees, while also taking stock of your business objectives. From user experience to globality, we’ll unpack crucial elements of payout method adoption.

When it comes to payouts,(i.e.the simple act of sending or disbursing funds),organizations are met with widely varying preferences from payees. Whether they’re claimants, workers, suppliers— anyoneaccepting paymentsnowadayshastheir own personal preferencewhen it comes to how they’d liketocollecttheir funds.

The challenge lies in choosing payout methods that both satisfyyourorganizationalgoals andensure payee happiness and satisfaction.One size does not fit all, and in some cases, the lynch pin could beaddingadditionalservices to existing payments solutions, thereby creating a more holistic and attractive service offeringfor payees.Whatever the case, we’ve compiled a list of the top 5 considerations when choosing the right method, or methods, to offer your payees. We’ve also included a Payout Comparison Guide for a quick cheat sheet on the benefits and drawbacks of each payout method.

HowBusinessObjectivesImpact Payout Method Selection

Before weighing out the various considerations, it’s important to take stock of your organization’sbusiness objectives, orvalue drivers.These are the driving force(s)thathelp fuel anyfinancial, operational, andgrowth-relateddecisionswithin your business.Identifying and managing business goals helps your organization focus their attention on activities that will have the greatest impact on value. Examples of the goals behind these drivers could be:

• Reducing business costs
• Increasing operational efficiency
• Investing in global expansion

Whether you’re looking totackle global expansion,or improve conversions in your domestic market,the most successful payout adoption program willwork to help youaccomplishthesebusinessvalue driversas well ashelpimprove the experience of your payeesat the same time.So,how do the following considerations ladder up to helpdrivebusinesssuccess?

Top 5Considerationsfor Choosing the Right Payout Method

While this list isn’t exhaustive, it serves as a good starting point in determining the payout methods that may hit the sweet spot between satisfying your payeespreferences andmeetingyour business’objectives.

1. Payeedemand anddemographic

   Does your grandma still send you a $20 check in the mail for your birthday? There’s a reason for that.Her generation relied on checks as a primary form of payment. Just asGen Z payees in Zürich may not value the same payout methods as Baby Boomers in Boston.The most important consideration when selecting a payout method, unsurprisingly, isunderstandingyour(possibly diverse)payee demographic,listening to your payees’ preferences,and adjusting your payout offerings based onthat feedback (andwhat’s possible for your organization).

2. User experience

   The payout experience for the end usercan say a lot about your business, andevenreflect on your values.For instance, an intuitiveself-serveexperiencefor payeestocollectpaymentsin their local currency (even if it differs from the base currency of your business) goes a long wayto building positivebrandsentimentand trust.

   Further, abranded experience for payees can be an important assettohelp drive business performance, build loyalty, and inspire action from yourpayeeor userbase.While there are obvious benefits to having happy payees, such as loyalty to your organization or brand, you could also bedifferentiating your businessfroma competitor who doesn’t offer as many payout options, as much flexibility, or as convenient an experience.

   Experience is twofold;of course,thepayout experience and ease of use for payeesis important. However,initialadoption, integration, and automationof payoutworkflowsfor stakeholders within yourbusinessoperationsteamsarealsocrucial considerations.Carefully evaluate optionscan helpensure that you aren’t adding any additional effort or strain on your developmentor in-house paymentteams,where applicable.

   You may need apayout mechanismthat’sintegrated intoyourexisting siteor platform, or it may make sense to adopt anexternal turnkeyenvironmentandsimplywhite labelthe front end.Either way, if you’re looking to adopt an experience where payees can self-serve, it needs to streamline the workflow for your business without adding any complexity.

3. Cost

   Well, no surprises here: this is a big one.Payout methods have inherently different costandtransaction structures— for both organizations and payees —which should be taken into consideration.

   When sending international payments, fees can be applied at significantly varied ratesdepending onthe method that is used.Not surprisingly, themore frequentlya payee collects their funds, the higher the likelihood of thosetransaction feespilingup.Exchange rates and currency flips should be front of mind whenconsidering payout methods for a globally dispersed network.

   Businesses should also account for the ongoing internal coststhat can ariseduewhensupporting one ormultiplepayoutoptions.Payments reconciliation and transaction monitoring arejust a coupleexamples of internal costs tied to the management of multiple payment options. Controlling how transaction reports are generated, the way in which funds are collected, or even how refunds are initiated and managed arealsoimportant elements to appreciate here.Partnering with a trusted payout provider,especiallyone that provides full stack capabilities and integrated treasury management support, can go a long way to helping streamline operations as well as reduce costs both for your payees and within youroperational teams.

4. Speed and flexibility

   Let’s talk transfer times. For some businesses,thestatement“payable within net 30 days”simplydoesn’texist. Takethe on-demand economy, whichprefers payment methods that offer near-immediate confirmation that the transaction was successful,andalso, thatfundsare availablefor theprovider tocollect.In this day and age, it just doesn’t make senseto havea business model that centers aroundthefastdeliveryof products, orexecutionofservices, and not have a payout structure set up to match that efficiency.

   Thepayout methods that you choose to implement can go a long wayinsupporting your need for speed… orresultin troublesome roadblocks.It’s no surprise then that your company’sability tobe flexible andprovidefast and efficientpayoutoptionalitytothe sellers, drivers, and users on your platformisbecoming increasingly more important.

5. Geography and globality

   The world is getting smaller as it becomes more digital.As these digital experiences start to become the norm, payees are expectingpayouts to follow suit and be presentedinmultiplecurrencies,diversepayout methods, and languages localized to their region.

   Supporting multi-currency payments is critical in facilitating global operations,not to mentionmulti-currencypayout optionalitycan also help payees avoid beingchargedhighfees for currency conversion.

   The relevance of a payout method will depend on the geographiclocationswhere your suppliers or payees are located, and thus whereyour organization’s payoutfootprintis looking to reach. For instance,large enterprise orgoods and services marketplaces looking to expand need to be able to scale in new geographies withoutnecessarilyopening a local entity orhaving tomovefunds cross-border.As such, you’ll need to account for any regulations or restrictions in the country or regions you’re expanding to—orfind a service that does.

   Additionally, some countries have limited banking infrastructure, thoughthisshouldbe a hurdleto your payout expansion and business scalability.Digitalpayout methodsand cash pickup are in strong demand for payees as they appeal to banked, unbanked, and underbanked populations, and can even offer additional benefits to businessesbylowertransactionand administrativecosts.

Check out the Payout Method Comparison Guide

Review the Payout Method Comparison Guidetocompare and contrastHyperwallet’s9 transfer methods,andbetter understandthebenefits, requirements, and considerationsapplication toeachunique offering.

PayPal’s payout capabilities, powered by Hyperwallet,offersup to9 unique transfer methods for payees to gain access to their funds.When you choose to work withHyperwallet, your organizationhas the ability toenable all or a selection of thesepayoutoptionsfor payees to then self-serve and select their preferred transfer method.