4 Tips to next day card processing
As a merchant, accepting credit cards as a form of payment for goods and services has its own pros and cons. One advantage of using credit cards is that the clients can complete transactions fast and with convenience. A long turnaround time from the completion of the payment to the actual funding into your account could be one of the few minor issues that you may encounter as a merchant.
Fortunately, there are several credit card processors that offer next day funding. From a typical two to four days of processing time, you may already expect credit card payments to be funded to your account more or less 24 hours after the transaction was completed. The process goes a long way from the cardholder, to the credit card issuing bank, to the acquiring bank (or the one that manages the transfer), and finally to the merchant. With next day funding, transfers and deposits are initiated on the same day the payment was made by the buyer. In standard funding, only a memo for the deposit will be made the following day. Visit MyPaymentSavvy to learn more about the fastest and most reliable next day card processing services for your business.
Does this concept sound a little complicated to you? Better read on and consider these 4 useful tips to choosing next day funding services.
- Know about the cut-off time of your credit card processor.
Credit card service providers have different protocols on processing transactions and transferring funds. They also follow different cut-off times with regards to sending a batch to the ACH network. The ACH (Automated Clearing House) processes all electronic financial transactions in the United States. While most processors follow a 5 PM (EST) cut-off time, there are also those that close as early as 1 PM and as late as 9 PM (EST). Know which cut-off time is best suited for your business.
- Learn the difference between memo posting and funding.
Always check if the card processor is really offering next day funding or just one day memo posting. With next day funding, an actual ACH deposit is made later on the same day of payment and not just a memo post. Know the difference between the two when looking for the best credit card processor.
- Make the most out of next day card processing.
Next day funding is particularly great for businesses that require steady cash flow to purchase materials and equipment, to pay for utility bills, and to fund their payroll on time. Businesses that operate during the night or on weekends can also benefit from a good cash flow even when the banks are closed; allowing them to maintain a sufficient volume in their inventories.
- Expect short delays from time to time.
Next day funding was conceptualized mainly to speed up the processing time of credit transactions. But just like any other type of funding, there are also risks when using this kind of service. Issuing and acquiring banks are working double time to mitigate security threats. That is why they may spend more time on monitoring transactions before granting approval to a suspicious batch. Expect a short delays from time to time which is, nonetheless, necessary for your protection as a merchant.