September 04, 2023
by David Goodale
How Long Does it Take to get Your Money from Payment Processing?
(Slightly edited from video transcript for greater readability)
Hello, David here at Merch-Antaccounts.ca. Today we're tackling the topic of: How long does it take to get your money from payment processing? Stay tuned, we'll dig in in one second.
Typically, merchants want to be on daily funding. That's where you get your money every single day, and the money is usually deposited into your account the next day.
It's a little bit different for retail merchants and e-commerce merchants, because e-commerce merchants from a credit card processing perspective are considered to be higher risk than retail merchants. This is because retail customers are physically present but e-commerce customers are remote and this remoteness presents more opportunity to commit fraud.
Typically you're going to get daily funding. Now, when you're funded daily, it doesn't always mean your money arrives that day or the next day. Sometimes it can take an extra day. Maybe you're at a credit union, and your credit union takes an extra day to process the electronic funds transfer. The point is that you want to know that the payment processor is sending you your money every day.
That's where you get your money once per week. Some merchants are on once-per-week funding.
Oddly this is something that merchants complain about initially but frequently want later on. The reason they want to switch to weekly funding is: that they realize, that's a lot of work because they have to to log into their bank account every day and look at the deposits. What a pain.
After a while they request: Can you put me on weekly funding? The answer is yes. You can go on weekly funding. It's really if your business, something that I tell merchants, this is kind of a personal thought, but I believe it's true. If you're running a business that's so tight margin that you can't operate the business for a week without cash flow, it's a little bit of a concern to the payment processor.
If you want daily funding, make sure you explain why, but your answer shouldn't be, we're desperate for cash. It could be along the lines of, it's just how we like to manage our cash flow.
How to switch to daily funding
What can you do if you're waiting too long to receive your money? What if your payment processor's holding onto your funds for longer than you want?
You can ask them, hey, how can I get onto daily funding, what do I have to do? What if I have a longer processing history with you?
For example, if you're a new merchant or a new business, maybe you are on weekly funding, ask them if after six months you can switch to daily funding.
If you're an established business, maybe you can say, hey, at our next year's end, I know it's going to be a great year for us. If I give you our year-end financial statements, you can see that we made a lot of money on our income statement and balance sheet, please put me on daily funding. Then the answer should be yes.
Whatever funding schedule you want, you should ultimately be able to get it as long as you have a stable business without excessive chargebacks.
If your payment processor cannot help you, then switch. Those two (daily and weekly) funding schedules are most common in payment processing. I hope this helps. By the way, if you want to get a quote for payment processing or talk to us about daily funding, reach out to us at Merchant-Accounts.ca. Thanks for watching.
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