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What Is Batch Payment Processing?

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Last editedFeb 20232 min read

When it comes to payment processing, businesses have an array of different methods to choose from. Sometimes it makes sense to process each transaction in real time. Yet there can also be advantages to processing payments in batches. We’ll cover how batch payment processing works below, so that you can determine the best method for your business.

What does batch payment processing mean?

Throughout the course of a workday, the typical business might receive dozens – if not hundreds – of payments. Each must go through the same authorisation and settlement process. With batch payment processing, these transactions are saved and grouped together for processing.

Batch payments also refer to outgoing business payments. For example, if you owe money to multiple vendors, you can send these out as a batch from the same business bank account. This is more efficient to set up than making individual payments to each recipient.

How does batch processing payments work?

A batch processing payment gateway will run through all the day’s authorised transactions at once. This is usually at the end of the business day, but for businesses with high volumes of transactions it might be more frequent.

Batch processing can be used for credit card payments as well as bank transfers. It stands in contrast to real-time processing, which authorises, approves, and settles each transaction individually.

How does credit card payment batch processing work?

Your online store or POS captures credit card details throughout the day which need to be settled with the customer’s bank. There are two steps involved with credit card payment batch processing.

  • Step 1: The credit or debit card is authorised at the time of transaction. This means that the details are verified as legitimate, with available funds to cover the transaction. Once approved, the transaction is saved for later.

  • Step 2: All saved credit card transactions are sent in a batch to the payment processor. The processor breaks down the list of transactions by issuing banks, which are sent on for settlement. The credit card isn’t charged until this time later in the day.

Real-time vs batch payment processing

There are pros and cons to both real-time and batch payment processing. Real-time processing keeps on top of the settlement process, which can lead to the money hitting your bank account sooner. However, this comes at a cost. Many payment processors charge a fee for each transaction. By collecting transactions and processing them together in a batch, businesses cut down on these fees.

Additional benefits of batch payment processing include:

  • Saves time by automating your card processing

  • Gives extra time to review all transactions at the end of the day before they’re processed

  • Reduces security risks by minimising the time that card details are sent in transit

How to choose a batch processing payment gateway

Before selecting any new payment processing system, it’s important to weigh your options carefully. There are plenty of payment gateways on the market that can assist with batch processing, not only for credit cards but also for bank payments. Before choosing a batch processing payment gateway, you should also consider whether you’ll need to adjust transactions before sending them on for processing. For example, hospitality businesses need to add gratuity charges to their transactions at the end of the day. 

GoCardless provides a streamlined way to automate your payment processes, either alone or with one of our third-party integrations. This includes popular accounting software like Xero to keep finances in order. Businesses can take both recurring direct debit payments as well as one-off payments in real time, all using automated solutions for your convenience.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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