What's the difference between a batch payment and a bulk payment?

The right payment processing method can help you send and receive payments quickly and easily. But what if you need to send a lot of payments at the same time?  

There are two basic payment processing types you can choose from – batch, and bulk. In a nutshell, a bulk payment is where you pay multiple beneficiaries at the same time via a single transaction. In contrast, a batch payment is where you pay multiple beneficiaries at the same time in different transactions. In either case, you can make payments on a weekly or monthly basis, and schedule future payments. 

Since both bulk and batch processing allow mass payments, which method should you choose? Let’s take a look into both payment options and their pros and cons. 

What is a batch payment? 

With a batch payment, you can pay multiple recipients simultaneously via a single payment and account. This is more efficient than making numerous separate payments, each of which needs to go through authorisation and settlement processes. Handily, you can also group transactions and process them in the future. This streamlines payments and makes them more efficient.  

Batch payments are ideal for businesses that: 

• Pay recurring invoices. 

• Have international payrolls. 

• Want to simplify high transaction volumes. 

What is a bulk payment? 

With a bulk payment, you can make different payment types simultaneously using multiple sets of instructions, so it’s a more customisable form of mass processing. Many business owners combine bulk payments with a real-time payments infrastructure to automate future transactions.  

Bulk payments are best suited to businesses that regularly pay: 

• Salaries to employees. 

• Contractor and freelancer fees. 

• Dividends to shareholders. 

• Direct debit to vendors. 

• Payouts to contest winners. 

What’s the difference between a batch payment and a bulk payment? 

The primary difference between these two types of mass payment is that bulk payments let you combine multiple instructions for different payment types so that a single transaction takes care of all of them simultaneously. A batch payment, on the other hand, combines different instructions for a single type of payment to various recipients. Importantly, this means multiple batch payments can be combined into a single bulk payment – but not vice versa. 

Batch and bulk payments can be made in several ways: 

• Credit/debit card. 

• Bank-to-bank transfers. 

• Non-bank payment service providers. 

If you’re using a batch transaction to request payment, you can send a single payment link to multiple customers via email, SMS or a website button. In the UK, most people make batch payments by electronic funds transfer (EFT), the Clearing House Automated Payment System (CHAPS) or the Faster Payments Service (FPS). 

Bulk payments are often used to pay utility bills and other regular business expenses that happen each month. Paying multiple invoices in one go can help you save time, reduce your administrative burden and minimise costs. 

What are the advantages of batch and bulk payments? 

As a business grows, its transaction volumes become larger and more diffuse. This is where batch and bulk payments can help. Collectively, they make transactions secure and fast, plus they’re cost-effective because you don’t have to pay multiple fees for one-off transactions. In fact, research firm Gartner says that the cost of processing a single UK invoice can be anywhere between £4 and £25. 

Other advantages of mass payments include: 

• Better transaction capacity and efficiency: Batch and bulk payments reduce time and the risk of manual data entry errors. Because you can combine multiple payments into one and automate them, you reduce the need for human intervention. 

• Better vendor reconciliation: You can store all invoices in one central place and process them automatically, minimising the number of transactions you have to reconcile. This can make record-keeping compliance much easier. 

• Enhanced cash flow management: Mass payments give you better visibility into your accounts payable. Meanwhile, making multiple payments at the same time reduces float and boosts liquidity, improving cash flow and potentially supporting international growth. 

• Improved payment data accuracy: Accurate payment data can provide meaningful financial insights, which can help you make better business projections and strategic decisions. 

• Better risk management: Bulk payments cut the risk of fraud associated with large individual transactions. By combining payments, you also reduce the number of employees handling transactions, which further lowers risks. The upshot is better fraud detection because real-time payments make it harder for cybercriminals to steal money. 

Do you need a business bank account to make batch and bulk payments? 

In short, no, you don’t need a business bank account to make batch or bulk transaction. An alternative account with a provider like Interpolitan Money can work just as well, if not better. 

Traditional banks have strict account-opening eligibility criteria based on residency, citizenship, minimum assets and income. If your company is a start-up, an SME or the UK branch of a foreign entity, you might find it very hard to open a domestic bank account.  

In contrast, providers like Interpolitan cater for many different company structures, offering a range of alternative banking solutions that streamline processes.  

Save time and money with batch and bulk payments 

Authorised and regulated by the UK Financial Conduct Authority (FCA), Interpolitan offers cutting-edge payment solutions for businesses and individuals. Being connected to global payment networks, we can ensure back-to-back payment processing across jurisdictions via SWIFT, SEPA, Faster Payments and BACS. 

At Interpolitan Money, we blend cutting-edge technology with truly personal service to deliver a comprehensive alternative banking solution. Learn more about how we can support batch and bulk payments for your business, or open an account today.