“Sorry, the payment got delayed. Just waiting for the bank to approve you as a beneficiary.”
Sounds like a familiar conversation with one of your vendors or customers?
We surveyed to understand the challenges businesses face with their current account to disburse customer payouts, vendor payments, and employee salaries.
78% of business owners voted ‘waiting on the cooling period for beneficiary activation’ as the major pain point.
To maintain healthy vendor & customers relationships, business owners need to make real-time payouts. And the cooling period for beneficiary activation makes this impossible.
What is the cooling period for beneficiary activation?
The cooling period is defined as the time taken by banks during which a remitter cannot transfer funds to a newly added beneficiary.
Here, a beneficiary is the person that receives the payment & remitter is the one that sends the payment.
The cooling period can be between 30 mins to 4 hrs. And if a beneficiary is added after the banking hours, it gets approved & activated only the next day.
In cases where your beneficiary requires the fund to be transferred immediately, this cooling period can be a cause of concern.
Before we move further as to how we can solve this major challenge, let’s take a quick look at the current process of a bank transfer.
Payouts via Bank Transfer – NEFT, RTGS, IMPS
Most businesses use bank transfer for their B2B payments. With online banking becoming the norm, NEFT, RTGS & IMPS are the most popular third party transfer payment modes.
In order to use any of the above payout modes, you must –
1) Head over to your netbanking portal
Log in using your user ID and password. Select the option for third-party transfers or fund transfers.
2) Add a beneficiary
To transfer funds via NEFT, RTGS & IMPS, you’ve to select a payee or a beneficiary.
There are two options to do this, depending on if the beneficiary account is in the same bank or other bank branches.
Now, add beneficiary’s bank account details.
- Name of the account holder
- Account number
- Account type
- IFSC code of the beneficiary bank branch
3) Add details of funds to be transferred
Once you have successfully added the beneficiary, choose the transfer option (NEFT, RTGS, IMPS) & add the amount of funds to be transferred.
4) Wait for the beneficiary to get activated
Banks generally take 30 mins to 4 hrs for authenticating beneficiary details. During this cooling period, the funds will not be transferred resulting in payment delays.
Once the beneficiary is activated, the funds are transferred to the specified account.
Depending on the mode of payment (NEFT, RTGS, IMPS) & the cooling period for beneficiary activation, the entire process of payouts can take up to 2 – 24 hrs.
No more cooling period for beneficiary activation
Timely payments to vendors or customers are crucial for business success & any delay can cause an interruption in service. Businesses need to ensure dispute-free, quick payments to vendors & customers.
Do you resonate with the 77% business owners who want to make 24*7 instant payments to customers, vendors & employees via NEFT, RTGS, IMPS & UPI?
We’re a match.
With RazorpayX, you can add beneficiaries as a contact immediately & make single or bulk payouts without any cooling period.
And, add multiple bank accounts/UPI ids against a single contact.
RazorpayX payouts not only empowers business owners to make instant payments but simplifies the payout journey to a T –
- Ensure safe transactions & complete visibility with approval workflow & maker-checker for payout creation
- Save time by scheduling single or bulk payouts up to 3 months in advance
- Track every payment with ease via smart error-code mapping
- Automate reconciliation & bookkeeping
- Make impactful business decisions with automated detailed financial reports
While you can do instant payouts with RazorpayX without a cooling period, we’ve gone a step further to make payouts even more frictionless for businesses.
Make instant payouts without beneficiary account details
We identified that a lot of payments like,
- refunds to CoD customers
- security deposit refund
- winnings disbursals in online gaming
need to happen without beneficiary bank details.
In these cases, businesses record only the basic customers’ details for getting them started with their service. Only during specific scenarios as mentioned above, would they need the bank account details.
With RazorpayX Payout links, businesses can remove the effort required to collect the beneficiary account details & automate payouts.
We get that simplifying payouts is only one part of managing finances. Sign-up on RazorpayX today & automate your entire business finances, end-to-end.