Payouts

This feature allows you to create multiple and secure third party payouts (users, merchants, providers, customers, etc.) using the funds you have in your PayU Account.

Payouts is an integration service available under demand, and its activation depends on a security and risk analysis. For more information or requesting this service, contact your Sales Representative.

How do Payouts work?

Through Payouts, you can request many payments to many users easily. You only need to provide the amount to pay along with the information of each third party (such as name, identification, bank information, etc.), and PayU transfers the requested amount after validations.

Let’s explain Payouts using an example. A merchant offers products and services available for delivery; this merchant uses PayU as their online payment platform and has an account where they collect the money paid from their customers. This merchant has many couriers to whom, they pay a fixed amount per delivery they made.

Each week, the merchant pays the amount earned to each courier. To do this, they can use Payouts to pay directly from their PayU account instead of managing the payments on their own, in which case, the merchants must transfer the money to their accounts or use funds from other sources.

To request the pay, the merchant sends the list of third parties they want to pay along with the amount of each one, PayU validates these third parties and schedules the payout.

The amount of each payout plus the processing fee is deducted from your account. Contact your sales representative to know the processing fee to use this service.

Payout states

Payouts are performed in two main steps: the first step is when you request the payment to a third party. The second one is when the request has been approved and moves to the transfer of the funds.

The transactional procedure of Payouts has the following states.

  • AWAITING SANCTION SCREENING: this state indicates that the third party to whom the payment will be made is subject to validation of restricted lists and further PayU policies related to risk analysis. If a third party does not pass this validation, the payment is automatically rejected.
  • AWAITING TO SEND: if the third party passes the validation or is not subject to it, this state indicates that the request is ready to be processed. In this state, the communication with the service has not been performed.
  • SENT TO CREATE: this state indicates that the communication with the service has been completed and the Payout request is in creation process.
  • CREATED: this state indicates that the request has been created and has become into a payout. When the request becomes a payout, it moves between the states explained in Payout states. The next state depends on the result of the payout process.
  • REJECTED: this state indicates that the request has been rejected. A request can be rejected when:
    • The validation of the third party fails.
    • The creation of the payout was failed.
    • You request the cancellation of the Payout request and it has been approved.
  • PROCESSING COMPLETED: this state indicates that the Payout process has been completed.
  • AWAITING TO CANCEL: this state indicates that you have requested the cancellation of a Payout request. Take into account that you can request the cancellation of a Payout request when this is not in Banking process.
    In this state, the communication with the service has not been performed.
  • SENT FOR CANCELLATION: this state indicates that the communication with the service has been completed and the Payout request is in cancellation process.
  • CANCELLATION FAILED: this state indicates that the request of cancellation cannot be executed due to PayU policies or because the request is not being processed by PayU.

The following diagram illustrates the state changes:

Payout states

Once the Payout has been approved, it is transformed into a payment order. The following are the states of a payment order.

  • REQUEST_BY_THE_MERCHANT: this is the initial state of the transaction, once you send the list of third parties to be paid and the third parties are approved, the transaction takes this state.
  • IN_VALIDATION: due to PayU policies, each payment may be subject to validation. This state indicates that your request must be reviewed under our internal policies. If the validation fails, the payment which didn’t meet the policies is rejected.
  • IN_PAYU_PROCESS: this state indicates that PayU has started the process payment.
  • AWAITING_BANK_SENT: this state indicates that PayU has started the transfer of the amount to the third party.
  • IN_BANKING_PROCESS: this state indicates that the payment is being processed in the third party’s bank account. At this point you cannot cancel the request nor update it.
  • CONFIRMED_BY_THE_BANK: this state indicates that the third party has received the transferred amount.
  • REJECTED: this state indicates that the transaction has been rejected either by PayU (due to policy breach) or the Bank (due to errors in the bank information).

The following diagram illustrates the state changes:

Transaction validation

Every Payout request is validated to verify that the person who will receive the money is not included in restricted lists. This validation may take up to 24 hours which may delay the payment procedure.

When a person must be verified, PayU checks first in the validation cache, so a person is only validated once during the cache frame.

If a person does not approve the validation, the Payout is not performed and you are notified if you have configured the notifications of validation results.

Considerations

Take into account the following considerations:

  • Payout is not a service included by default. You must request it and sign an annex to the contract to agree the fee and further conditions. Contact your Key Account Manager to contract this service.
  • Merchants are responsible for the integrity and the correctness of the third-party data. PayU does not validate that the data provided by the merchant is complete and correct. Furthermore, the update of data must be requested by the merchants.
    PayU is not responsible for unsuccessful transactions due to wrong data.
  • Payouts allows local payments only. The merchant may be international (under security and risk analysis) but they can only request payouts using the funds collected in the processing country.
    For example, if the merchant ABC processes in Colombia and Peru, they can request payouts to third parties in Colombia using the funds collected in Colombia; they cannot request payouts to third parties in Peru using the funds collected in Colombia.
  • Once the payout is created, it takes the regular flow in PayU. This means that you can see the payout created in your PayU module.
  • The merchant must prove the relationship between them and their third parties to guarantee that the transaction is legit.

Transaction processing

Payouts uses ACH (Automated Clearing House) transfers to send the payouts to the beneficiaries, this means that the transactions are processed in batch during the day. The time when the transaction will be processed is explained in the following table:

IN_BANKING_PROCESS state time ACH process time Estimated time of response
05:31 p.m. - 07:20 a.m. 9:00 a.m. 7:55 p.m.
07:21 a.m. - 09:45 a.m. 11:30 a.m. 10:40 a.m.
Next working day.
09:46 a.m. - 12:30 p.m. 2:00 p.m. 1:45 p.m.
Next working day.
12:31 p.m. - 02:50 p.m. 4:00 p.m. 4:40 p.m.
Next working day.
02:59 p.m. - 04:20 p.m. 6:00 p.m. 6:20 p.m.
Next working day.

Transactions that reaches IN_BANKING_PROCESS state after 4:20 p.m. will be processed in the next working day.

Notifications

When using Payouts, you can create a WebHook to configure notifications on status changes. It is recommended to configure the WebHook before sending the Payout request when configuring notifications.

You can configure a WebHook for one or more of the following events:

  • Transfer creation: sends a notification when a payout request is created.
  • Transfer update: sends a notification when an update is requested for an existing payout.
  • Validation result: sends a notification when the validation is completed with its result.

To learn how to create WebHooks, refer to this article.

What’s next?

The integration with this feature fo is performed using API integrations.

Last modified August 30, 2021: Change in the logo (533a423)