Time is money, and the longer it takes for a business to collect its funds from electronic transactions like credit card payments, the more costly it can be. Especially in the sped-up global marketplace, where consumers expect deliver ASAP and inventories have to be quickly updated, even a one-day lag can mean losing the competitive edge. Conversely, faster funding for a shortened revenue cycle gives a business a competitive advantage.
Standard ACH is Comparable to Snail Mail
In the 1970s a system and network, the Automated Clearing House (ACH), was created to facilitate the transfer of funds between banks and customers, including merchants. That enabled money to move more swiftly, without the need for slower methods like cash or paper checks. Standard ACH transactions normally take two business days to process, which seemed lightning fast 50 years ago. But in the digital age of e-commerce, waiting that long can feel like using a stamped letter sent through the post office versus delivering the message via email or text.
Fortunately, it is now possible to choose between three different options to ensure consistently dependable cash flow. Businesses can use standard ACH and expect to wait at least two days for their funds. They can also use expedited next-day funding, and have the money in their account within just one business day. But the newest innovation is Fast Track Funding, which makes funds available by the end of the same business day. Funds are not simply en route or in process, but are settled and ready for the business to access. The only exceptions are non-business days, when banks themselves are closed, like Sundays and legal holidays. NTC Fast Track Funding can also be used to process batches as large as $25,000.
How it Works
NTC Fast Track Funding gives businesses the reliability and reassurance that they can literally bank on funds being available by a precise time. As soon as a merchant submits a batch of authorized transactions, NTC Fast Track Funding technology flags that batch as requiring immediate attention. For example, when a batch is submitted before six in the morning Eastern Time on a Monday, the cash settlement is guaranteed by the end of that same business day. Accounts can be reconciled, sales and revenue reports can be generated, and cash is on hand to pay for inventory and overhead. Meanwhile other businesses that do not have the advantage of Fast Track Funding are still waiting around to get paid.
Oftentimes ACH payments are slowed down because the business doesn’t bank at the same institution that initiates the ACH transaction. But NTC Fast Track Funding overcomes that problem by putting the funds into an express lane. That not only eliminates expensive delays, but also the stress, doubt, and uncertainty of not knowing when funds will arrive. Cash flow is easier to manage, which can have a significant impact on business budgets, operations, and performance. That is especially important in times like now, when historic economic challenges require swift agility and insightful, confident decision making.