Next Day Funding: Are Funds Always Available Right Away?
Next day funding is a feature offered by payment processors that provides merchants with access to the money from sales one business day after transactions are processed. It’s a highly beneficial feature, especially for merchants doing heavy business on weekends, as it ensures cash is available as quickly as possible, improving financial health, emergency management, short-term planning, and more.
Do All Processors Offer Next Day Funding?
Not all payment processors offer next day funding. In fact, the norm in the payments industry is for merchants to wait two to three business days before funds are available, thanks to something called a “standard hold.”
Standard holds are temporary holds processors put on funds for two reasons. First, to allow the transaction settlement process enough time to complete behind the scenes; second, to mitigate the risks of fraud and bad merchant behavior. Since a processor is ultimately on the hook for refunds if a merchant can’t or won’t cover them, the standard hold can act as a sort of escrow process that covers the processor to an extent should a merchant disappear.
What Benefits Does Next Day Funding Offer Merchants?
Processors that do offer next day funding to merchants do it as a way to generate a competitive advantage, as next day funding represents some significant benefits for merchants that impact areas like finances, planning, and even just overall well-being.
Healthier cash flow: Cash flow is arguably the most important aspect of a company’s financial health. Next day funding ensures merchants have faster access to cash, helping maximize liquidity.
Better emergency preparedness: The global pandemic taught many small businesses a difficult lesson in emergency preparedness, but even small emergencies like burst pipes or unexpected expenses can be devastating if a merchant isn’t prepared. The faster access to cash offered by next day funding ensures even merchants without large emergency funds will have the money they need on hand when the unexpected arises.
Clearer planning: Knowing there won’t be periods of weeks or even just days without constant cash flow enables businesses to more accurately forecast and make plans for the short term. Something as simple as knowing the money will be there to bring on extra staff for a big event is much easier with next day funding.
Peace of mind: Getting access to the money from sales the following day offers merchants fewer headaches and a sense of satisfaction knowing that their money is sitting in their bank account right away instead of someone else’s.
What Types of Merchants Can Access Next Day Funding?
Because next day funding takes away the processor’s safety net to an extent, extending it to a merchant represents a risk. Understandably, that means not all merchants are eligible for next day funding, even if their processor offers it as a feature. Generally speaking, to access next day funding, a merchant will need to have a strong and well-established history of successful transaction processing, with no major issues with things like fraud or chargebacks.
If that sounds like a description of your business, you shouldn’t have to put up with waiting days to access your funds. BAMS offers our merchants next day funding, and our 9 PM EST cutoff time is one of the latest in the industry, meaning any transaction you batch before 9 PM will be available in your account by 7 AM the following business day – as little as ten hours later.
To find out more about BAMS next day funding and how our interchange-plus pricing model can provide you with the lowest, most transparent fees in the industry, get started with your comprehensive five-point price comparison now.
