Blog|Faster Payments

The Value of One-to-Many | Bulk Disbursement Series 1 of 3

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In previous posts, we’ve focused mainly on the value and capabilities of Interac e-Transfer® as a streamlined and modernized payment instrument for moving business funds. One of these capabilities is a compelling offering for businesses and organizations that need to pay many recipients at once: Interac e-Transfer Bulk Disbursement. To use this service, a sending organization creates a file of recipient email addresses, amounts, and security questions and responses, and provides this to their financial institution. In turn, the financial institution formats and sends this information to the Interac network for processing, and – just as with personal transfers via Interac e-Transfer – funds are secured and payment notifications are sent to the recipients in 30 minutes – or even instantly*. The cost and time involved in printing, processing, and sending cheques simply vanishes.

 
By turning high-volume payments into a fast, inexpensive, and simple operation, Interac e-Transfer Bulk Disbursement is perfectly-suited for a wide range of situations, including:

  • Payroll for temporary or casual staff: While setting up AFT direct deposits for permanent employees may be worth the effort, few organizations find it justified for paying temporary staff or casual labourers (some of whom may be equally reluctant to provide personal financial information to their temporary employers). The traditional payment default options have been cash or cheques, both of which come with significant operational costs and security risks – as well as, in the case of cheques, requiring workers to wait for days before receiving cleared funds.
  • Insurance claim payouts: Insurers deal with very high volumes of customer claims on a routine basis, and making payouts on successful claims generates significant costs through not only the collection of financial information, but also the printing, sorting, and mailing of cheques. The process also requires insurers to maintain sufficient cash in their accounts to pay cheques that will not be received, opened, deposited, and cleared for several days, and sometimes weeks. What’s more, in the case of a natural disaster where a large spike in claims occurs and must be dealt with immediately, cheque printing and processing can bog down the system, and forces customers to wait days or weeks for the funds they need immediately.
  • Emergency fund disbursement: Just as in the case of insurance payouts relating to disasters, emergencies that affect many people at once create similarly-sized logistical and operational challenges for the aid organizations attempting to help. While many organizations have become proficient at raising funds digitally, they still face the problem of how to disburse those funds to people in need both rapidly and inexpensively (because every dollar a charity spends on operations is a dollar not spent on aid), and how to efficiently pay a potentially large number of vendors and individual workers – not to mention the problem of mailing cheques to homes that may no longer exist.
  • Rebates and winnings: Marketers have long seen advantages in using rebates and contests to boost product sales, but such promotions naturally imply high operating costs stemming from the printing and mailing of thousands or potentially millions of cheques to consumers who have mailed in their rebate coupons (or have won small monetary prizes) after a successful promotion. Such costs naturally eat into the margins on the product itself – but more importantly, the wait times imposed on consumers by processing and mailing often make promotions seem less attractive and thus suppress response rates.

Clearly, there’s a great deal of upside to be had – for both organizations and the people they employ and serve – in the ability to get money to many people quickly and cheaply. By leveraging the Interac e-Transfer technology platform and user experience that we’re all so familiar with, Interac e-Transfer Bulk Disbursement delivers on both counts. In subsequent posts we’ll take a closer look at how it applies and adds value to the core processes of payables and receivables.
* Instant Interac e-Transfer allows recipients to deposit the funds in real-time. Available for select financial institutions and subject to transaction limits.

 

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