Thought Leadership

Talking Trends in Commission Payments Distribution

TL;DRJennifer Anderson gets some insight on the future of commission distribution and makes a major prediction of her own.

You know that money isn’t the only reason that individuals get involved in direct selling. There are other attractions as well, like social interaction and the sense of community. But don’t let that convince you that money isn’t an important part of the equation. In fact, according to the Harrison Poll in the Direct Selling News’ November 2014 Issue, 23% of distributors are using their direct selling commissions to pay off debt, 40% use the extra cash flow to supplement their income, and 25% are saving their earnings for the future. For these individuals, money is freedom—and when people are waiting for freedom, they tend to get impatient.

Jennifer Anderson

Jennifer Anderson

Some of you might know me already. I’m Jennifer Anderson, and I have roughly 20 years of experience in the direct selling space. Throughout my career, I’ve been attracted to opportunities that allow me to be an advocate for the field—I want to make sure that distributors have access to the tools they need to be successful in direct selling. I believe that one of these tools is an efficient commission distribution process, and that’s what brought me to Hyperwallet.

The Women’s Power Circle

I’ve always admired Lisa Shields, Hyperwallet’s intrepid founder. Not only did she build Hyperwallet’s industry-leading commission platform from scratch; she has consistently improved the platform’s service to provide a better experience for the field. You can understand my excitement, then, when after just a month at Hyperwallet, she invited me to join her on the Women’s Power Circle call—a closed meeting of direct selling executives and founders to share ideas and insights. The call is hosted by Michelle McDonough and Kate Gardner, two of the most prominent thought leaders in the direct selling industry, and Lisa would be the guest speaker for September (her second appearance as the call’s keynote). Would I like to join? Uh, yeah!

So, what did we talk about? Well, you can listen to the full recording of the call—just shoot me a request through the author form at the bottom and I’ll send you a download. Alternatively, if you’re pressed for time, I’ve highlighted some of the major take-aways below.

Importance of Commission Payments Choice

Lisa kicked things off with a high-level introduction to Hyperwallet, talking about our functionality and giving a brief overview of our company’s history. She highlighted that Hyperwallet likely wouldn’t exist today if not for the direct selling industry’s unique payment requirements (sending high volumes of low value payments to a global sales force). Although we’ve expanded our scope to include clients in other industries, commission distribution in direct selling remains a major portion of Hyperwallet’s volume.

What differentiates Hyperwallet from other commission payment providers? Lisa insisted that it was all about choice. Rather than dictating how their distributors get paid, a Hyperwallet client simply specifies who gets paid. Distributors can then choose their preferred method for receiving commissions. Lisa explained: “Basically, what this means is that you’re paying a distributor—you’re not paying a bank account or a prepaid card. You’re paying an individual, and they get to decide whether they want direct deposit, a branded prepaid card, or direct to an existing debit or credit card.”

Remember: you’re paying a distributor—you’re not paying a bank account or a prepaid card. Click To Tweet

Of course, there are also some big changes on the horizon for commission payments in the next few years. According to Lisa, two stand out as particularly important: real-time payouts and payment APIs.

Trending Towards Real-Time Commission Payments

Lisa pointed out that there is a growing expectation for speed in the delivery of commission payments—“work today, get paid today.” While real-time commission payouts aren’t standard yet, they could be very soon. “More and more, payout providers should be supporting real-time, end-to-end delivery; at least for prepaid cards.” Hyperwallet is already providing real-time prepaid payouts to a number of clients.

Similarly, bank deposit speed is improving around the world on a country-by-country basis. Although bank deposits in the United States are largely next-day, NACHA has recently announced that they’ll enforce multiple ACH settlement periods in 2017. This won’t mean real-time bank deposits, but depending on when a payment is submitted, it could be same-day. In fact, Lisa noted that this “single innovation” will mean that roughly 70% of Hyperwallet’s bank deposits arrive same-day, up from about 15% right now. True, real-time ACH could be a reality in the United States within a few years.

Payments APIs Are the Future

The other major trend in commission payments is the shift from apps to APIs. Increasingly, payment providers are offering API integration that allows their clients to incorporate payment functionality into their own websites and apps, rather than requiring a separate payment portal. “The payments industry is starting to understand that it’s your brand and your distributor experience that matters.” It’s about time, huh?

API integration is almost certainly the future of #directselling commissions. Click To Tweet

What does this mean? Lisa argued that, while branded, turn-key payment portals are a great option for companies right now, API integration is almost certainly the future. “Integration with your applications, your platforms, is the new trend. We see API integration as becoming more important in helping you build and preserve your brand.” Even if you aren’t ready to use APIs just yet, Lisa suggests that you find a commission payout provider with API functionality to prepare yourself for the coming years.

(In case you missed it, Hyperwallet just launched the private beta of their worker payout APIs this week. Your developer team can sign up for a unique sandbox account here.)

The Power of the Field

When I think about the trends we’re seeing in direct selling—not just in commission distribution, but in technology more generally—I think about replicated websites. Remember when those were the hottest tools to have? Companies were often slow to adopt them in the beginning, either reluctant to change or incapable of integrating them into their back end. Many field leaders demanded replicated websites, or left for the more technologically-adept businesses that could provide them. Ultimately, they became a standard feature in most direct selling toolkits.

'I predict that fast, flexible #commission payout platforms will become commonplace.' - @JMA135 Click To Tweet

I predict that fast, flexible commission payout platforms will become similarly commonplace for direct selling companies in the coming years. Paying the field faster and giving them choice of how they receive their commissions enhances the recruitment experience, improves long-term retention, and creates a happier sales force. A slow, rigid commission distribution process does the exact opposite. Remember: this industry relies on volunteers that trust your products and your brand; they can make or break your company and leave at any time. So why not give them what they want?

Never underestimate the power of the field.

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