When a merchant closes their credit card batch for the evening, most processors collect those batches and send them off to the merchant’s bank after midnight. The merchant’s bank receives those funds and posts them the same day. They are available in the merchant’s account 24 hours later, or the following day. So Monday night’s batch goes to the merchant’s bank in the wee hours of the night, which is Tuesday morning. The merchant sees their money in their own bank account Wednesday morning.

Along came a competitive payment processor who decided they could move money earlier, before midnight, so that merchants could get their money deposited Monday on Tuesday morning. Many other processors have copied the program to stay competitive. This is called next day deposit and it works like this.

The merchant must batch out on Monday before 6 PM EST in order for the money to arrive at his bank on Tuesday morning. For some merchants this works terrifically well. For other merchants, 6 PM is inconvenient. Perhaps your business is on the west coast and 6PM EST is only 3PM pacific time. Some merchants choose to batch in the middle of their day in order to move some money faster, however, this makes daily reconciliation with their cash register challenging. Restaurants could choose to batch in the afternoon after a shift and get that batch deposit the next morning. But if they are open until 1 AM, that late batch does not get deposited until 6PM the next day and moneys are credited to their account another 24 hours later. So the late batch at 1AM on Monday doesn’t arrive in their bank until Wednesday. And again, there could be a reconciliation challenge with their Point of Sale.

Still, a lot of merchants have taken advantage of next day funding and it is helpful for their cash flow.

Recently processors have offered a new program, a fast deposit option, which allows merchants to deposit to their business debit card instantly or almost instantly within 2 to 5 hours. Processors who offer this are, in actuality, loaning the merchant money for one day in order to push the money through to their merchant’s bank account faster. There is a charge for this “loan”, and it is usually 1%. PayPal charges 1%. Square charges 1.5%. WorldPay charges $4 per batch or you can choose a 1% option, which ever works better for you.

Electronic Money Company can set you up with a WorldPay account. WorldPay’s fast deposit program sends batches to your bank account in 5 hours or less and they require you to set up the program to fast deposit every day.

We also have a second option should you choose to run your business with a Clover station or Clover mobile tablet system versus a credit card terminal. The Clover has a button on it which sends the batch INSTANTLY to your bank account. You pay 1% for that batch but you can pick and choose when you want your money fast or when you want your money with the normal next day deposit. You only pay the extra 1% on the batches you choose to send rapidly. Many businesses like to use the Clover fast deposit on the weekends, so they have batch deposits accessible by Monday morning when they typically write their payroll checks. The rest of the week, they are fine with next day deposit.