Now more than ever, cash-flow is king, so it literally pays to do everything in your power to get the money out of your customers’ bank accounts and into your hands as quickly as possible.
Why extend the wait if you don’t have to?
Settle out every day
It’s smart to set your terminal to auto settle.
While batching sounds like complex computer terminology, in practice it’s the list of all the transactions you’ve processed since you last closed your terminal. Anything you’ve processed since then is considered “pending” and is awaiting approval from issuing banks.
Remember, “authorized” doesn’t mean “paid.” Getting a card approved is just the first step, and signifies that the bank has put a hold on the designated amount of funds. This hold ensures that your customer cannot spend this money until you’ve had the chance to finish the transaction by batching out.
The process of “batching out” tells the cardholders’ banks to go ahead and settle up accounts, so that the authorized funds can be released for transfer into your account.
Long story short: Until you batch out, you’re not getting paid.
A batch a day keeps the doctor away
Get into the habit of closing out your terminal every day, therefore minimizing the time between running your customer’s card and when the money is deposited into your bank account.
Even if receiving payment ASAP isn’t a huge priority for you, there are other benefits to setting a routine and batching out daily.
Apart from speed payment, batching out every days has the following benefits:
1. Some providers issue penalties for transactions that aren’t batched out within a certain time frame of being processed (usually 4-5 days max)
2. After this time frame, banks can remove the pre-authorization hold and you are not guaranteed to collect your money.
That can only be bad for you, and sets up the possibility that you don’t get paid on time, or that the customer has spent the money, and so receives an NSF fee (and blames you for the penalty).
Batching daily avoids all the hassles, and also has the advantage of getting valuable funds into your accounts sooner, so there’s no reason not to get on board!
The possibility of next day
Standard funding is 48 hours. Ask your provider if they offer next day funding, which is fast becoming a common offering.
Generally to qualify for next day funding you’ll have to make sure that you batch out before 6pm – check with your merchant provider for exact times.
Don’t presume that if you batch out in time you’ll automatically receive funds the following day, as often this is an option that you specifically have to request. Contact your provider and notify them that you’d like to be set up for next day funding and then enjoy the daily deposits!
Are they holding YOUR money?
Merchant account providers that keep your money in limbo by placing holds on your deposits can drive you crazy, but the fix is short and sweet.
Call up your provider and find out if there is a hold on deposits for your account. If the answer is yes, request that they be removed. As long as you have a good history with them it shouldn’t be a problem.
Providers will make exceptions to general provisions in order to keep customers happy and prevent them from jumping ship to the competition. It shouldn’t be that way, but that’s life in the big city.
American Express: It doesn’t have to be a headache
If your business accepts American Express then you should seriously consider getting on board with the AMEX ONE POINT program. There’s no cost to sign up, but not all providers are eligible so you’ll have to check it out.
The standard for AMEX deposits is 3-5 days, but with the AMEX ONE POINT program you can get much faster settlements along with a load of other bonuses such as one ACH for all cards, one statement for all card brands, one customer service source, and more payment choices for your customers.
Go forth and collect your money
At this point you’re practically a batching guru, and from now on you’ve got no excuse for not hearing the delightful sounds of new funds hitting your account every day. If your merchant account doesn’t allow next day payments, or if you just have a couple of questions, feel free to drop us a line, and we’ll talk you through it.