When should you move from manual to automation with APIs?

As your business grows, so does the volume of payments you have to make on a daily basis. If it’s only a couple payments a day, taking five minutes to log each payment manually is no big deal. But once you hit 100 daily payments, you’re spending over eight hours inputting payment details. And that’s assuming no breaks or time-consuming mistakes!

There’s no universal tipping point for when it makes sense to invest the time to integrate with a payouts API. But here’s a good rule of thumb:  If you’re considering hiring one to two people just to manage accounts payable, you’re better off taking that time to integrate and save years worth of salaries.

[Related: Multi-entity businesses, accounts payable, and too many bank accounts]

Three options for payouts: pros and cons

Before you take the plunge, let’s walk through the three main options for payouts and their pros and cons.

Option 1: Manual Payouts

• Pro: Simple data entry

• Con: Slow, poor accuracy

There’s a significant difference in time needed between a traditional bank and a neobank with well-designed payouts in their web app. We’ll consider everything that requires individual data entry per “manual” payout. 

Payment accuracy is essential to your business, so you’ll need to carefully read and input all the data for each payout (recipient’s banking details, amount, payment method, etc.). This takes time! When starting your business, this is the clear first step, but quickly becomes unsustainable as you scale.

Option 2: Batch Upload

• Pro: Minimal setup, medium speed

• Con: Medium accuracy

For sheets-lovers (CSV files) not quite savvy enough to do API integration themselves, batch upload provides a solid middle-ground option. If you have payments in the dozens but not hundreds, you can upload all of them in one “batch” CSV upload. (A CSV is a downloaded Google/Excel sheet with all the payment details arranged in neat rows). 

There are some complications, however. Different countries require different payment details, which makes multi-country batch uploads prone to user errors. Similarly, when you’re in a rush and trying to complete payments quickly without checking each entry, it’s easy for a single stray keystroke to cause one of your payments to fail, go to the wrong recipient, or send the incorrect amount — all costly errors. 

On the bright side, Airwallex has pre-made CSV payout formats for each payout location. So if you have a couple dozen payouts in a few different geos, you can avoid some of the complications around batch upload. Clearly, though, batch upload has its limitations as your business grows.

Option 3: API Integration

• Pro: High speed, high accuracy

• Con: Some setup

Now for the good stuff! Although API integration takes some upfront investment, it will automatically follow whatever logic you set up on your end to fire off quick and accurate payments at low cost. And no manual oversight is required from you. Airwallex employs a mix of automatic and hands-on transaction monitoring to ensure the compliance and safety of every payment. 

This ensures the maximum speed and efficiency of your payouts, while also putting you in line with how the world’s leading digital businesses manage their accounts payable. 

[Related: Nine actionable tips to set up your eCommerce financials for success]

Getting started: What’s next?

If you’ve decided that using an API for your payouts makes sense, here are some steps you should take. 

1. Find a company to handle your payouts

Finding a company that can cost-effectively payout to all the regions and beneficiary-types you need is important. Look for a company that can:

• Open domestic and foreign currency accounts in order to trade globally without the red tape

• Save time opening accounts across the globe. Eliminate excessive paperwork and wait times

• Protect your money in a secure, ring-fenced account you can access whenever you like

• Reduce costs with multi-currency capabilities leverage a sophisticated FX engine with no additional cross-border fees

1. Create a sandbox account 

Create a sandbox account that allows you to experiment with how your unique workflow will work with your provider’s APIs.

1. Conduct a Penny-test once the rails are live

“Penny testing” is acommon practice in banking where a few small value transactions are made to test the reliability of the systems and processes involved.

Payment “rails” are the infrastructure that carries money between a payer and payee. There are distinct payment pathways in each country. For example, the US has ACH for cheap regular payments and Fedwire for more expensive and faster ones. There are similar rails in each market. You want to make sure that everything is working as you expect before pushing a large number of payments through any particular rail.

Airwallex can meet all the global banking demands of your growing business, so you can sit back and relax! For more information about Airwallex, click here.