Instant funding credit card processing gives you access to your revenue stream without having to wait. Some merchant accounts take time to process payments, and many of them set aside money into a reserve account. Instant funding allows you to immediately use and transfer the cash you make at your business.
There are many important ways a merchant benefits from instant funding, these include:
When a customer buys with credit, they are essentially making an agreement that the money they spend will be repaid. As a result, the bank takes on the debt and makes a payment on behalf of the customer. This is one of the reasons why receiving immediate funds for credit card processing is difficult.
Nonetheless, payment technology is getting faster each day. Solutions like cryptocurrency, Echeck, and ACH payments allow merchants to access their funds immediately without waiting on the security confirmations and waiting period credit cards demand.
Merchants no longer have to deal with payment disruptions or delays in accessing their funds. With echeck merchant accounts, you can draw funds once the transaction is complete. In most cases, an ACH payment is nearly instant because of the secure nature of the bank-to-bank communication.
After a customer purchases a product or service on your site, their information is validated, tokenized then shared as secure payment data between bank channels. When this step is completed, the money you’ve earned is in your bank to use as you wish.
Credit cards take an average of two to three days to deposit on your bank account. This is sometimes delayed with big purchases that seem out of the ordinary. For high ticket items, or products in industries that are conducive to fraud, a bank may investigate the transaction thereby delaying the transfer of funds.
A merchant account with no reserve funds means every dollar you make at your business goes into your bank account. Small businesses operate with small margins so every dollar counts. Moreover, company owners should be in control of the earnings they’ve generated.
In order to obtain a merchant account with no reserve funds you’ll need to have a long history of quality transactions. Conversely, if you have a high chargeback rate your reserve account may increase. Find a payment processor who can work with their underwriting team to review your past processing and reduce or eliminate reserve fund requirements.
Reserve accounts are in place to help protect the customer and the bank. They are a safety net for both entities if a company were to incur multiple chargebacks or go out of business. In some cases, a bank may find that a business was operating fraudulently either by selling inferior goods, or not providing the services. They then use the reserve funds to reimburse customers.