Did you know that the number of instant payment transactions is projected to grow by at least 289% between now and 2027?
The global community is expected to perform more than 376 billion instant payments within that timeframe.Juniper Research
This underscores a major shift in how businesses and customers prefer to pay: seamlessly and immediately. The notable rise in cross-border instant payment providers supports this change. However, this method is not always smooth sailing, especially for performance marketers.
There are still a handful of challenges major industry players have yet to overcome, but the overall outlook points toward instant payouts for affiliate partners as the norm for the future of martech.
When “Instant” Doesn’t Mean Instant
In performance marketing, cost-per-action (CPA) rewards reign supreme. Advertisers pay out for completed actions, and their affiliates naturally want to receive their payment as quickly as possible.
The challenge here is that a completed action is often more complicated than it seems. For instance, e-commerce companies have return policies that give consumers a window of time to return their purchases. If this happens, either immediately or within the longer timeframe, that action is no longer complete, and the partner does not receive compensation.
Similar problems arise with industries like travel, too. Last-minute cancellations fall under the same category of uncompleted actions. While this is already somewhat complicated, it is made more difficult through the addition of international markets.
Because of these business models, it is normal for most companies with affiliate partners to operate on a delayed payment schedule, such as net 15 or net 30 contracts that give advertisers a longer period of time to pay their publishers.
With the ever-increasing interest in instant payouts, these payment delays are becoming understandably less appealing to publishers. In response, a potential solution has come forth.
Affiliate Networks Are Churning Out Faster Payments On Their Own Dime
Understanding that partners want their hard-earned cash as quickly as possible, performance marketing platforms have chosen to find their own interim solution to this problem. Many platforms have begun rolling out proprietary payment systems that are much faster than traditional methods in an attempt to bridge the gap between an approved, completed action and the subsequent payout.
In this scenario, these affiliate network platforms are taking on the risk of late payment or nonpayment and giving payouts to their publishers from their own funds. Essentially, these platforms are loaning their cash and betting on the fact that advertisers will reimburse them later when the action is marked complete.
While this sounds incredibly risky, the good news is that AI has become a huge help in this regard. As an example, Admitad Instant Payout Pro has become one of the industry leaders in this situation. It uses well-trained AI algorithms to predict the likelihood of an affiliate action being approved through the advertiser, which is a useful tool for mitigating potential risk.
This way, platforms like Admitad can pay commissions in hours or days rather than weeks. On top of this, the Admitad algorithm has already proven to be upwards of 95% accurate in its predictions, lowering the risk of nonpayment even further.
Bridging the Cash Flow Gap is Fueling Growth
This method of temporarily financing partners through predictive early payments is causing an interesting shift in the market as a whole. Platforms are now paving the way for affiliates to scale their operations faster and more reliably, freeing up resources that can be used for reinvestment.
It also gives businesses that offer cashback and loyalty programs a unique competitive advantage. With near-instant payouts, these companies can now provide customers with immediate reward payments, encouraging repeat business and incentivizing a faster purchase cycle.
Using this method of alternative financing also means that factoring is now possible. Performance marketing platforms can now potentially buy late or deferred payments from a publisher at a lowered rate in exchange for instantly accessible cash, benefiting both parties in the short- and long term.
Finally, using this method can help media buyers boost revenues as well. When there is a calculated ROI for every marketing dollar spent, they can use instant payout methods to directly cycle that money into campaigns.
Instant Payout Means Instant Advantages For Affiliate Partnerships
According to Bain, Net Promoter Scores show that Apple Pay holds the second-place spot in payment preferences, only surpassed by PayPal. In addition, 50% of Apple Card users in the 25-34 age bracket say it is their primary credit card. The same survey projects that consumer-to-business payments are slated to increase by 6% through 2027.
Cash is becoming less popular, and real-time account-to-account payments are consistently gaining popularity. This means that platforms with instant payouts and fast transfers will have a critical advantage in the coming economy. While it’s true that the infrastructure still needs refining, the fact remains: instant payments for performance marketing are here to stay.