There are two main points merchants need to focus on to ensure timely funding. First, identify what causes delays and implement best practices to avoid those. Next, know what processing alternatives are available to put businesses in the fast lane.
Delays Caused by Limits or Red Flags
Depending on a merchant’s history of credit card transactions, they may have a limit on the amount that can be processed in a given month or week. That can trigger a hold on funds. The same may happen, for example, if a merchant submits transactions that far exceed their typical transactions. During the delay the processor will conduct an investigation into what caused the unusual increase. That applies to batch transactions as well as any single transaction that may be for an abnormally high dollar amount. To avoid problems, communicate with banks and let them know when unusual transactions are going to be submitted. Also securely retain documentation, including cardholder signatures, to verify that the high-dollar transactions are legit.
If a customer disputes a credit card charge by going directly to their credit card company, that can cause a delay and a temporary reversal of funding, among other repercussions. The vast majority of customers take issues directly to the card-issuing bank because they see that as the easiest way to get a refund. Resolving those issues through direct, proactive customer service and clear communication and engagement with the customer can be much easier and less costly. That may involve a refund, credit, or exchange, or simply clarification. But taking the initiative is the key. Customers may also do chargebacks as a scheme to intentionally defraud merchants. In that case, working with a payment processing vendor who has security technology to detect and safeguard against potential fraud is strongly advised.
Manually-Keyed and ACH Delays
Manual keying of card transactions can also cause delays. A high frequency of manually-keyed transaction can even trigger a hold on merchant funds. Avoid those in favor of automated methods like swiping. Another kind of payment that can cause a delay is an ACH payment. That typically happens when the customer inputs incorrect ACH information or disputes or puts a stop order on the ACH payment. If credit card transactions and ACH transactions are submitted to the merchant’s bank in the same batch, a delay triggered by one of those bundled ACH transactions could delay funding on the entire batch. Since most processors have a cut-off deadline for merchants wanting to get their funds with 24-48 hours, merchants should also know those cut-off times. Missing the deadline is a common cause of delays in funding.
ASAP Same-Day Funding
The speediest option for any merchant is Fast Track Funding, which settles the transaction and makes funds fully available by the end of the very same business day. The only exceptions are days when banks are closed, like Sundays and holidays. Batches of up to $25,000 can be submitted and funded the same day with Fast Track Funding. Consider it the express lane for delivering merchants their money ASAP. Fast Track Funding solutions are easy to implement, and it’s like the difference between delivery of email versus snail mail. Money goes to work for the business sooner, not later, helping manage budgets, projections, cash flow, and virtually all other aspects of a business.