API-based solutions for sending payments to people without bank accounts

Question

I'm looking for inexpensive ways to send payments to hundreds or thousands of individual contractors, even if they do not have a bank account. Currently I only need to support payment in the USA, but may eventually be international.

What solutions exist that expose an API that I can submit payment details to? Or at least submit a batch file or some other electronic manner of submitting payment details. I do not want a manual web-based system where I have to log in and enter all payments into a web interface. Many payroll companies offer a web UI, but as I'll be making thousands of payments, I need it automated.

Here's the scenario:

I offer a service that allows an organization or manager-type person to coordinate contractors for very short term jobs. These jobs are typically only an hour or two in length. A contractor may get only one job over an entire month, several jobs spread out over a month, multiple jobs on a single day, or any other combination. Thus, a single contractor could earn as little as one job's payment up to potentially payment for dozens. Payment for a month could be as little as $10 up to $1000's.

Right now, the system provides payroll reports to the manager and it is the manager's responsibility to produce checks, stuff envelopes, and send mail via the US postal service. I'd like to remove this burden from the manager and have all the payments taken care of for them automatically by the system.

I'm not sure where to start or what the best options would be. I'm starting to look into the following solutions, but don't know specifics yet and would like some advice before pursuing them. I'd also like to hear about other ideas or suggestions.

• PayPal (Send Money, Adaptive Payments, x.com, other???)
• Amazon (Flexible Payments System?)
• Fund some sort of pre-paid debit card?
• Web service with API that mails checks for you?
• Direct deposit via a bank API (for users with bank accounts)?

The problem is that many of these contractors may not be able to obtain bank accounts or credit cards within the USA. I don't mind doing a hybrid of solutions, but are there any that would work well with this issue? I want the solution to be easy to use for the contractors, meaning that they can get the money easily (via check in the mail, debit card ATM withdrawal, etc.)

Answer 1

The Patient Protection and Affordable Care Act recently passed by Congress and signed into law requires you to provide the IRS with 1099 forms for all contractors now, not just the ones you do $600 or more of business with.

Your best bet is probably direct deposit for those with bank accounts and a rechargeable debit card for those without bank accounts.