Payment Modernization Strategies for Mid-Sized Banks: Preparing for 2025 and Beyond
Many businesses use file payments also known as bulk payments to pay wages, suppliers, staff reimbursements and contractor payments. With the advent of open banking, even third-party providers like accounting systems can facilitate bulk payments from within their own platforms. The seamless experience creates stickiness with business customers and is certainly a wake-up call for banks.
How are banks responding?
Banks offer this payment feature as part of online digital banking for businesses. Businesses can cater to the needs of making regular payments to multiple recipients using the Bulk Payment feature.
Commercial online banking at several banks offers the facility to import external bulk payment files to make multiple payments at once. Some of the neobanks offer this service as a subscription service. For instance, Starling Bank offers this at GBP 7($8) per month.
With facilities to import bulk payments via CSV formatted files or create bulk payments, businesses can assign pre-created payment groups for the payment and enter the payment amount and the pay-by date.
Bulk faster payments are also becoming a preferred method of payment for businesses that want to make last-minute payroll disbursements. Easier reconciliation, payment dashboards and tighter controls over payments through different permission levels are other benefits that businesses can enjoy on top of bulk payments. By taking advantage of customizable attributes such as limits, dates and amounts, small businesses can save time and effort associated with such payments. Innovative banks are powering gig payments by helping employers to pay multiple tip payments to many employees in a shift, using a single interface.
Additionally, banks power value-added services, offering bulk payment APIs to businesses so that businesses can integrate this feature as part of their platform, third-party apps, or back-office systems.
How is this different in open banking scenarios?
Bulk payments offered by fintechs on open banking platforms allow businesses to choose their bank account. As consent is pivotal to sharing data, the business consents to the fintech platform using its bank data. The fintech platform pays multiple invoices/employees on behalf of the business. The seamless integration of bulk payment processing in the business value chain makes it attractive to businesses.
Commoditization in banking no longer works because of the itsy-bitsy nature of businesses, each with a unique need. Business banking users are lured by hyper-personalized, granular services offered by fintechs that address the unique problems of their businesses. Bulk payments are one of the low-hanging services that banks can offer to retain and attract new business customers.
Interested to offer Bulk Payment capabilities to your business customers at your bank? Contact us at connect@finzly.com.
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