Normal Credit Card Processing vs. Next Day Funding Merchant Services

Many merchant services providers are adopting next day funding to grow their next day funding merchant services, and in a post last February, Carry Notheis explained many of the basics and benefits of this hot new service. However, despite the popularity of next day funding merchant services, many merchants don’t completely understand how it works. So to clarify this tricky topic, we thought it would help to compare next day funding to how credit card payments are typically processed by merchant services providers.

Normal credit card transaction processing
Typically, it takes two days from the time of sale for funds to appear in a merchant’s bank account. Say a boutique sells a blouse for $100 dollars on Tuesday afternoon, and after closing at 6:00 pm, the manager batches out and settles the terminal. That $100 (minus any fees) will be deposited in the boutique’s bank account on Thursday.

So what occurred between Tuesday and Thursday to make that deposit happen? Early Wednesday morning, the merchant service provider processed the debit and credit card transactions from Tuesday, submitted them to the card associations and initiated a transfer of funds to deposit the money into the boutique’s bank account. The money was then transferred via the ACH network. Because the ACH network transfers money between bank accounts overnight, the transfer occurred late Wednesday or early Thursday, and so the boutique received the funds sometime on Thursday during the day.

Next day funding
Now, using the same boutique example, let’s examine the next day funding cycle. If the boutique had next day funding, their merchant services provider would have processed the blouse transaction late Tuesday night and initiated the funds transfer to the ACH network Tuesday night before its last cut-off time. The ACH network would have transferred the funds overnight, and so the deposit would have appeared in the boutique’s bank account on the next day---Wednesday.

It sounds simple, but it can be tricky because each payment processor has its own processing and funding methods. Processors have to meet the cut-off time of the ACH network, and so they have to set a cut-off time for their merchants. This cut-off time varies from processor to processor because, depending on their systems and capabilities, some processors need more time to get everything in order to meet the ACH network cut-off time.

Furthermore, other processors may circumvent the ACH stipulations altogether. Collaborating with banks, they may “memo post” the transactions to the merchants’ accounts before the funds have really been transferred. This process relies on the policies of each bank and often requires funds to be held at a certain bank.

Jeff Zimmerman is Vice President of Product Management and Marketing at Clearent and has held management roles at Network Solutions and Intuit. Jeff brings 15 years of product management, finance and marketing experience to Clearent. Clearent is an experienced merchant services provider offering solutions such as mobile payment processing, wireless terminals, and next day funding merchant services. Learn more about how we can aid your credit card payments service and let us know any questions you might have.

 

How to Use Social Media to Your Advantage

In today’s digital age, it’s becoming more important than ever to connect with consumers where they live. No longer is in-store communication the only factor that plays a role in your customers’ purchase decisions. With mobile phones, tablets and laptops being seamlessly integrated into the lives of consumers, we are beginning to see a shift to constant connectedness. We need to find new ways to reach people where they live, work and play – social media platforms.

Many large banks and credit card processing companies are currently active on social media, creating conversations within their larger communities, but what about the smaller community banks? With social media, you can have the best strategy for reaching your audience, but without the resources, time and effort your execution may fail. 

Although it may take a little more planning, banks and credit card processing companies can both agree that social media is valuable. Let’s take a look why social media is important, as well as techniques to make it work for you.

 

Why Use Social Media?

Builds Loyalty: When your customers begin engaging with your brand on a daily or weekly basis, they’ll feel more connected on a more personal and less formal level. Once they make that connection with your brand, they’ll be more likely to stay loyal. 

 

Where Do You Begin?

Make it a job: Believe it or not, implementing a social media strategy is going to take work and time – which may mean finding the right employee within your company, or an outside source. It’s important that you create a unified message and brand voice that everyone can enforce. Be honest, be sincere and offer real solutions.

Consistency: Be consistent. Are you going to communicate with your customers once a week, twice a week or each day? Try to stick to a schedule so your customers know what days and times you will be communicating with them. 

Value: Give your consumers something they will value. Inform them about your brand and let them know about any promotions. When promoting your credit card processing company, don’t just ask that they sign up. Instead, inform them of solutions such as next day funding merchant accounts.

Engage Prospects: Make your content fun and interesting to engage consumers. Host contests, ask questions, take polls, etc. Ultimately, providing information about your services shouldn’t take the front seat; you should be providing interesting content that relates to your customers. 

Whether discussing your credit card processing company or next day funding merchant accounts, it’s important that you take notes as you go along and review results. Constantly improve your social media game to reach more consumers where they live – online. 

Have you been using social media to build consumer loyalty? What techniques have you found to be working for you? Leave us a comment.

 

About The Author

As Vice President of Business Development, Kate Root is focused on helping Clearent expand its strategic ISO partnerships, as well as growing financial institutions’ merchant services programs. Kate’s 25 years in merchant services spans senior management roles in both issuing and acquiring, supporting financial institutions and ISOs. Learn more about our next day funding merchant accounts and other products and services. Clearent is a credit card processing company providing passionate service to our clients. Contact us today for more information!