How Real-Time Payment APIs are Transforming Payroll Software

Posted on June 27, 2023

Imagine a world where a business's payroll processing is smooth, efficient, and error-free, including payments. Sound too good to be true? Introducing a real-time payment API integration, the ticket to an empowered payroll solution. 

With the introduction of payment Application Programming Interfaces (APIs), organizations everywhere are revolutionizing their approach to managing employee payments. 

Let's dive into why this game-changing technology is on the rise and how it can transform your payroll platform.

Why Now

The traditional workforce paradigm of full-time, long-term employment is shifting. More and more people are opting for part-time or noncommittal work arrangements—some by choice and some by need. 

Gig Workers Real Time Payments

This shift will impact payroll platforms and society’s expectations as a whole. Payroll software has to adapt to meet the changing needs of the workforce head-on.  

The new expectation is to have flexible payment schedules. Workers want to be paid immediately for their hours; they don’t want to wait until next week or the end of the month. We cater to workers who may not be tied to a full-time job, may be working multiple jobs, or may have irregular income streams. Regardless, the market share of those that need instant access to funds is growing.

Accessing their pay quickly and easily is becoming increasingly important, and those payroll platforms that can meet this need are likely to win in the end. 

Real-Time Payment APIs: Welcome to the Future of Payroll Management

You might be wondering – what exactly is a real-time payment API? 

A real-time payment API is a software interface that instantly transfers funds between bank accounts. It provides immediate availability of funds, settlement finality, instant confirmation, and integrated workflows, making it faster, more efficient, and more secure than traditional payment methods. Real-time payment APIs allow for single and bulk payments, both one-off and recurring, and provide access to real-time reporting and payment status updates, aiding reconciliation.

Real-time payment APIs are becoming increasingly popular due to their ability to offer faster access to funds 24x7x365, improved cash flow management, and reduced costs associated with payment processing. 

Real-time payment APIs provide significant benefits to payroll software, making them a valuable tool for those looking to integrate a payment solution into their offering.

So, how does this work in practice, and what can it deliver?

Real-time Payments, Updates and Reporting

With an online payment API, enterprises can deliver instant access to funds with real-time direct deposits within the payroll system. 

A synced dashboard offering live transaction updates and detailed reporting. Any changes made reflect across all relevant systems, providing vital and accurate insights into cash flow and transaction status. 

VoPay's real time payment API dashboard

Customizable API Payment Solutions 

 It's important that the ADPs of the world have access to various payment rails. 

One of the key advantages of utilizing this technology is its flexibility in catering to specific payment needs. Many providers must offer tailor-made API payroll payment solutions designed around unique requirements, such as industry-specific payment preferences or international transactions.

Examples include:

Early Wage Access Programs 

Real-time Wage Deposits 

Extensive payment rail accessibility 

Multi-currency support for companies handling international payrolls

Payroll Functionality To Meet The Needs Of The Next Generation 

The labour market is changing; it is fluid, and the typical workforce has evolved. There’s the rise of gig work, an increase in seasonal worker demand, and freelancer platforms are booming. This is why payroll platforms must be flexible and functional for what is coming next. 

By integrating a payment API solution into payroll software, the opportunities for integration with other third-party services that complement existing processes flourish (think expense management).

It is the future of payroll management – offering a range of benefits through automation, real-time payouts, and expanded pay functionality.  In just over five years from now, Millennials and Gen Z  are about to make up 72% of the global labour force. 

Is your payroll software ready? 

My business predominantly employs Gen Zs, many of whom don't have a bank account; they do have a card. Can we send their payment to their card?  

My employees prefer to get paid by e-Transfer can you send their weekly tip allotment by e-Transfer?  

I’m running a business with 1000 employees. My employees expect to be paid at the end of every shift.  Can your software do that? 

What about digital wallets?  So many of my contractors are asking to receive their money in a digital wallet. Is this possible? 

When your payroll software has the right tools to augment your business, you stay ahead of the curve of what’s coming next.  

Empower Your Platform Users With Instant Payouts 

Organizations are vying to attract and retain top talent; suddenly, payments become a way to come out on top. 

Nothing is more vital for employees' peace of mind than getting paid right and on time. Payments are crucial to maintaining a positive work environment and are becoming a way to retain your best talent. That's where this solution can be incredibly beneficial for your customers. When payments are integrated within the payroll platform, organizations find managing employees' salaries easier than ever. 

1. Faster Payouts and Early Wage Access

54% of Canadians are living paycheque to paycheque.  In America, that number leaps to 63%. Access to real-time payroll would go a  long way toward relieving their financial stress. As a result, an increasing number of enterprises are looking for instant payroll payout capabilities to help solve this challenge. And this is where we see payment technology come to the rescue.

Employee engagement increases, and retention rates increase with early wage access. Enterprises find allowing employees to access a portion of their earned wages before their scheduled payday is a game changer in the war on talent. 

Providing employees with real-time wage payments, multiple deposit options, and early wage access ensures a win for everyone.

2. Payroll Processing Automation And Recurring Payments

Eliminate manual data entry tasks related to paycheck processing. Let’s face it; payroll payment processing is a time-consuming task. Be it from the manual data entry when inputting banking information, determining who has been paid and when, or issuing paper cheques.

Many of these labour-intensive tasks can be automated with a payment API integration. Customizable payroll automation tools allow the ability to set up recurring payments to specific groups of individuals and make changes to scheduled payroll payments. Onboard and pay new employees faster and easier.

3. Robust Security

Employee and contractor payouts mean handling sensitive employee information such as bank account details – making security paramount when choosing technology solutions for payment processing. Today’s modern payment platforms are designed to protect sensitive data from unauthorized access or fraud attempts.

Organizations want the assurance that all payment transactions are safe and secure. Payment APIs deliver advanced encryption techniques and payment tokenization tools.

Success Stories: Faster Payroll Payouts For The Win

Numerous businesses have realized the potential and are integrating payments into their payroll payouts to reap significant rewards. 

As an innovative ride-sharing platform operating worldwide, Uber leveraged payment technology to disperse driver earnings and expenses seamlessly. By embedding a payment solution into one unified system, they gained significant cost savings and improved overall efficiency in driver payouts.

Airbnb, the global vacation rental marketplace, also utilizes payment technology to manage its vast network of hosts' payouts effectively. With a robust payment API integration, Airbnb can quickly process and disburse funds to hosts through real-time bank account payments

Embracing real-time payment  APIs has led companies and services worldwide to simplify their operations.

Find The Right Payment Partner and Watch Your Business Grow

Payroll platforms must give employees what they want to stay ahead of the curve. Innovative money management tools to move funds in needed ways will give you a competitive advantage.

Find the right payment partner; look for: 

Compatibility - Ensure it seamlessly integrates with your existing software systems.

Scalability - As your business grows, you'll need a solution that can adapt and expand alongside it. Opt for an API that supports scaling without compromising on performance or security.

Customer Support - Reliable customer support is essential when implementing new technology; choose a provider with a strong reputation for assisting clients throughout the integration process.

Payment Rails - Accessing multiple payment rails such as account-to-account payments such as EFT and ACH, e-Transfer for Business, and Visa Direct provides organizations greater flexibility, efficiency, and risk mitigation. This flexibility can help them expand their global reach and better serve their customers.

At VoPay, we cover all bases to ensure your payroll system is smooth, secure, and scalable. Looking to deliver set-it-and-forget payroll payment automation?  We can help!

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