As businesses expand into digital payments, efficient and secure payouts infrastructure becomes a critical part of operations.
Bastion’s regulated wallet API offers a unique opportunity to build this infrastructure, combining technical scalability with regulatory compliance. This article outlines how Product, Compliance, and Engineering teams can leverage Bastion’s infrastructure to build a robust and value-driven payouts solution.
Step 1: Understanding the Payouts Workflow
At a high level, payouts infrastructure involves the movement of funds from a business to recipients, typically users, employees, or partners. With Bastion, this can be done across various digital assets, including stablecoins and cryptocurrencies, with the following steps:
- Wallet Creation: Each user or recipient requires a wallet.
- Fund Management: The business holds assets in their master wallet or a treasury wallet.
- Compliance Checks: AML and sanction checks are applied to each payout.
- Payout Execution: Transfers occur from the business wallet to the recipient wallets.
- Transaction Confirmation and Reporting: Every transaction needs to be logged, confirmed, and reported for both internal purposes and regulatory audits.
Bastion’s APIs simplify these steps by automating much of the wallet management, compliance, and transaction execution.
Step 2: Leveraging Bastion for Key Infrastructure Components
1. Wallet Management: Easy API Integration
Bastion's API allows for seamless wallet creation with just one line of code, enabling you to create wallets for every recipient, whether they’re customers, contractors, or partners. This allows for flexibility in managing payouts at scale across multiple currencies with:
- Custodial Wallets: All wallets created are custodial, meaning Bastion handles the custody of assets, allowing your company to stay focused on core operations without worrying about key management or security issues.
- Custom Smart Contract & Programs Interactions: For companies that leverage complex onchain protocols, smart contracts, or smart contract wallets, Bastion wallets can be used to interact with any contract or program you need to.
- Multi-Asset Support: Bastion supports multiple cryptocurrencies and stablecoins, enabling flexibility in how payouts are executed depending on recipient preferences.
2. Transaction Routing and Execution
Bastion offers connectivity to the most cost-efficient blockchains for executing payouts. This ensures that high volumes of global payouts can be managed without running into exorbitant fees or slow transaction times.
- Cost Efficiency: A smart routing through blockchains reduces transaction costs by using a much cheaper path compared to traditional payment rails.
- Scalability: The infrastructure is designed to support high volumes of transactions, making it suitable for businesses that need to execute frequent or large-scale payouts.
3. Built-in Compliance and Regulatory Support
A major advantage of using Bastion is its built-in compliance framework, which is particularly valuable for businesses operating in regulated markets, more specifically
- Regulatory Coverage: Bastion’s MSB (Money Services Business) status and MTLs (Money Transmitter Licenses) allow your business to operate within compliant channels for sending and receiving payments. This simplifies operations across jurisdictions without needing to navigate complex regulatory landscapes independently.
- KYC Screening: Bastion handles know-your-customer (KYC) checks seamlessly as part of the wallet creation.
- Transaction AML Screening: Bastion also screens all deposits and withdrawals with its rigorous AML/CFT checks and handles the associated flow of funds appropriately to simplify the operational and technical lift for your teams.
For your Compliance team, this means reduced risk exposure and simplified reporting structures. We also help you avoid the need to build expensive vendor relationships with know-your-transaction (KYT) vendors as we have this built-in within Bastion.
4. Security and Insurance
Security is paramount when building payments infrastructure, especially when dealing with digital assets. Bastion provides an advanced security framework, combining hardware security modules (HSMs) and Nitro Secure Enclaves - all covered under our insurance policy:
- Private Key Security: Bastion ensures that cryptographic keys for wallets are generated and managed in secure environments, preventing any unauthorized access to sensitive data.
- Secure Signing and Policy Enforcement: Transactions are signed within secure hardware environments, enforcing multi-signature approvals, time-based limits, and transaction caps. This ensures no single point of failure.
- Crime & Cyber Insurance: Digital assets held within Bastion are covered under our crime and cyber insurance policies to manage risks of asset loss.
Step 3: Bringing Value to Your Teams
For Product Teams
Bastion enables you to focus on building user-friendly products without getting bogged down by technical complexities. By abstracting wallet management, compliance checks, and transaction execution into simple API calls, your team can deliver a payout feature that works across multiple use cases with minimal setup.
- Rapid Integration: Bastion’s easy-to-use APIs enable you to roll out a payouts feature quickly, reducing the time to market.
- Cross-Chain Capabilities: Supporting multiple assets and chains allows you to offer more flexibility and appeal to a broader user base.
For Compliance Teams
Bastion’s compliance-first approach reduces the burden of adhering to regulations. Its built-in AML, KYC, and reporting tools ensure that compliance checks are performed at every stage of the payout process, helping you avoid regulatory pitfalls.
- Automated Compliance: No need to manually implement compliance checks; Bastion does it at the API level.
- Audit-Friendly Reporting: Detailed logs for every transaction make audits easier and more transparent.
For Technical Teams
Bastion abstracts much of the complexity involved in managing wallets, executing secure transactions, and ensuring compliance, allowing technical teams to focus on integration rather than building custom security or compliance frameworks from scratch.
- API Documentation: Bastion provides clear, well-documented APIs to simplify the integration process.
- Scalability and Reliability: The infrastructure is built to handle high transaction volumes without compromising on security or performance.
Conclusion
Building payouts infrastructure with Bastion allows product, compliance, and technical teams to work seamlessly together on a highly secure, scalable, and compliant platform. Bastion simplifies everything from wallet management and transaction execution to compliance and reporting, providing immense value across your organization.
CONTACT THE TEAM
If you’re ready to build or enhance your payouts infrastructure, Bastion’s team is here to help
Reach out to us today for a demonstration and explore how our wallet infrastructure can elevate your business
