Batch processing in Mule allows processing of messages in batches by initiating batch jobs. A batch job splits messages into individual records, performs actions on each record in parallel, and reports results while optionally outputting processed data to other systems. Batch processing is useful for integrating or synchronizing data between applications, extracting-transforming-loading data from flat files to databases, and handling large volumes of API data. Mule's batch feature introduced in 2013 simplifies processing large amounts of data through record-based reporting, error handling, and parallel processing.