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Next Day Funding

February 25th, 2011

Working in the payment processing industry, one of the questions I hear most often is “How quick will I receive my money?” While it would be great if you could get your money instantly, receiving your funds in 48 hours is standard.  To understand the time deposits take, let’s examine the process involved.

As you probably know, all of your transactions for the day are held in your terminal or software and are subsequently released at the end of a day in one “batch”. This is when the card issuer makes the debit to the card holder’s account permanent. The card issuer then sends the money to the settlement bank (24 hours).  The settlement bank then forwards the funds to your bank, which takes an additional 24 hours. These banking transfers all take place at night when we are sleeping and one business day is the fastest they can travel through the ACH system, thus making the fastest available deposit to a merchant 48 hours.

All hope is not lost, however. Some merchant service providers, such as Payex, can offer next day funding. That’s right; you could potentially get your hard earned money in as little as 24 hours.

The time it takes a transaction to process through the system technically does not change. Rather, if your business type is of low risk, you have decent credit, and you hold an account at the settlement bank, you could have your funds in just one day.  Understand that the settlement bank is in the middle of you and your processor, so the processor has not received their money yet. This means your processor is giving you your money before they receive theirs, so there may be a slight increase in your rate or a small amount of interest charged.

Nevertheless, if quick turnaround of funds is what’s important to you, it may be a small price to pay to have your money in just one day.

Entry Filed under: Advice

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