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When You Can Expect to See Your Money: Understanding Payment Processor Fund Availability

Learn when you can expect to receive funds from payment processing with credit cards and ACH. Understand authorization, settlement, and availability to optimize cash flow. Compare PayPal, Stripe, and Paystri funding speeds.

When you're running a business, one of the most crucial questions you might have about payment processing is, "When do I get my money?" It's not just about accepting payments; it's about knowing when those payments will hit your bank account. Let's take a closer look at this aspect of payment processing to shed some light on when you can expect to see your funds, regardless of your payment processor.

Understanding Fund Availability: When you make a sale, the transaction doesn't magically translate into funds in your bank account instantaneously. Payment processing involves several steps, including authorization, settlement, and fund transfer. Each stage contributes to the time it takes for your money to become available.

Authorization: This is the initial step where the payment is approved by the issuing bank. It's essentially a validation process to ensure that the customer has sufficient funds or credit available to complete the transaction. Authorization typically occurs in seconds, providing an immediate response to the merchant and customer.

Settlement: Once the transaction is authorized, it enters the settlement phase, where the actual transfer of funds takes place between the various parties involved—the issuing bank, acquiring bank, payment processor, and merchant account. Settlement times can vary depending on the payment method, card networks, and processing agreements. Generally, it takes 1-3 business days for settlements to occur.

Availability: After settlement, the funds are ready for deposit into your merchant account. However, the availability of these funds can still be subject to additional processing times imposed by your payment processor or financial institution. This is where the concept of "funds availability" comes into play.

Now that we've covered the key steps in the payment processing cycle, let's look at how long it takes to access funds based on different payment methods:

Credit Card Payments

Credit card payments are often the fastest way to get paid. As soon as a customer enters their card information and completes the transaction, the funds are available to you within 1-2 business days on average. This quick turnaround makes credit card processing ideal for businesses with quick inventory turnover or service providers who want to access funds quickly after completing work.

The catch is that credit card processing costs more per transaction compared to ACH payments because of interchange fees charged by card networks. Processing costs typically range from 2-4% per transaction. But for many businesses, the convenience and speed justify the higher fees.

ACH Payments

ACH stands for “automated clearing house,” which is an electronic network that facilitates bank-to-bank transfers. When a customer pays via bank account through ACH, it takes a little longer for payments to process and for funds to become available.

A typical ACH transfer takes 2-4 business days to complete. However, some processors offer a faster ACH funding time of just 2 days after an initial period. This quicker access to funds can help improve cash flow for businesses invoicing clients or accepting recurring payments.

The major advantage of ACH payments is lower processing costs. Transaction fees are usually under 1% with no fixed per-transaction fees. For larger invoice amounts or recurring subscriptions, those savings add up quickly compared to credit card rates.

In summary, ACH payments take longer to hit your account, though some processors do process bank transfers faster than others. But you’ll pay lower fees. Credit cards have quicker funding availability yet cost more per transaction.

How Do PayPal and Stripe Compare?

You may be wondering how PayPal and Stripe, two other popular payment services, compare for funding availability. Here’s a quick look:

  • PayPal: 2-4 business days on average for payments to reach your bank account or PayPal Balance.
  • Stripe: 1-2 business days for credit card payments. 7 days for ACH payments, though transfers usually complete faster.

So PayPal and Stripe have similar funding speeds for both credit card and ACH transactions compared to industry averages. The biggest differences come down to pricing models and specific features offered by each provider.

Tips for Faster Funding

If quick access to your funds is a priority for your business, here are some tips:

  • Accept both card payments and ACH. This gives your customers options to pay however they prefer.
  • If you invoice clients, remind them that ACH is the fastest way to pay. Add your banking details to invoices to make it easy to pay via ACH.
  • Take advantage of Instant Deposit features some processors offer to access a percentage of card sale proceeds quickly.
  • Use money management tools to monitor pending payments and deposits.
  • * After 6 months of processing with Paystri we offer 2-day ACH funding.

The faster you can access your funds, the quicker you can reinvest, grow your business, and reach your financial goals. Understanding how different payment methods impact funding availability is the first step to optimizing cash flow.

Why Choose Paystri?

When choosing a payment processor, you want a provider that gets you quick access to your funds. At Paystri, we offer next-day funding so you can rapidly reinvest earnings into your business. We also provide transparent pricing with no hidden fees, as well as exceptional customer support from our US-based team. Real people provide real answers, with over 90% of calls answered in under 30 seconds. For fast funding, great service, and honest pricing, Paystri is the payment partner you need on your side.

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