Elly Financial Technologies Limited
54 Poland Street, London, W1F 7NJ
54 Poland Street, London, W1F 7NJ
When you run a business, you expect to bring home the bacon after an exhausting day at work. Hence, seeing the fruits of your efforts and in your bank account in a short time is vital. However, the period between selling and getting the funds can take longer depending on your payment processing system.
Each transaction involves the client’s bank, your bank, and the merchant acquirer that makes the settlement. Often, this three-way communication can take a few days to clear payments. When transactions occur beyond bank opening times, depositing times generally extend. As a result, a fast settlement procedure is out of the question.
Typically, funds clearing periods, fees, and rates vary across providers. This article explains how quick settlement can alleviate stress and help with cash flow. It also sheds light on the past and future of payment systems.
When people started trading goods and services, they did so by a simple exchange. There was no such thing as quick settlement as merchants got paid right away and in nature. Here’s a brief overview of the evolution of payment methods.
· Before 3000 BC - The notion of payment was in the nascent phase. Thanks to the barter system, people exchanged goods and services depending on their value.
· Around 3000 BC – Commodity money such as pearls, beads, and animal skins were widely spread as a form of payment.
· 600-700 BC – Mints cast in bronze, silver, and gold became highly valued and took off in various cultures across the globe. Early coins held a particular value.
· Around 800 – The Chinese introduced paper money.
· 1659 – Bankers in London released cheques into the economy.
· 1816 – Gold-backed paper money became prevalent in the UK.
· 1950 – Launching of the first universal payment card by Diners Club.
· 1979 – Visa introduced the first credit card terminal.
· End of the 20th century - The Internet arrived, and digital payments developed along with it. Paying without cash or cheques was possible. Contactless cards emerged, too.
· 21st century: Virtual payments have evolved at break neck speeds. E-wallets, one-click transactions, escrows, and cryptocurrencies are some of the newly embraced concepts.
Virtual transactions marked the beginning of massive transformations in the payment world. Consumers are willing to try new technologies, provided those are more efficient and save them money. Below are a few factors that will impact businesses and buyers in 2022.
The BNPL model has rightfully earned its place in the mainstream. The Buy Now, Pay Later option allows shoppers to purchase today and spread the amount into several instalments with little or no interest. Though BNPL originated from credit models, it is way more convenient for merchants, thanks to a quick settlement. Undoubtedly, we’ll be seeing more of it in 2022.
Customers appreciate it when retailers recognize their loyalty and give rewards for points. These schemes help businesses retain clients’ loyalty and are a win-win scenario for both sides. Hence, more brands will adopt advanced technology designed to make customers’ money well worth it.
Cashback incentives have become a powerful tool in the hands of merchants. Many stores have introduced card or virtual cashback programs to offer buyers the chance to earn or save money with each transaction. Whether by collecting points or free items after a few purchases, the cashback trend is here to stay.
Amid the pandemic, digital and retail payments merged, so businesses had to take an omnichannel approach. Nowadays, almost everyone orders online and pays on delivery or collects the purchase at drop points. Hence, the future of retail is a mix of in-store and online. Brands wary of change should rethink and meet consumer expectations by embracing various payment methods.
The opportunity to use decentralized currencies for mainstreame-commerce payments would have been surreal just a decade ago. However, the future is already here, and more businesses accept crypto as a regular payment option at checkout. More specifically, over 50% of merchants claim they offer or plan to introduce crypto for online checkout in 2022.
In some sectors, typical merchant accounts aren’t quick enough. Wasting three working days for payments to settle leads to cashflow gaps. For instance, the hospitality industry relies on transactions later in the evening. At this time, banks don’t operate, so clearing gets even further postponed. Going the standard way usually means long settlement periods of over a week.
A few merchant account providers boast faster settlements for specific card payments. Yet, these providers require retailers to run the business banking with them. Other payment processing solutions offer next-day settlement but entail unusually high fees. They seek higher reserve percentages or prolonged reserve periods.
Waiting days for clearing payments bring loss and insecurity for businesses. Owners can’t purchase stock and pay overheads when the settlement is pending. Fortunately, smart payment solutions guarantee deposits the following business day. As a result, quick settlement accounts help streamline operational costs and turnover of companies.
Fast cash flow helps businesses procure supplies regularly. Getting money from card payments within 48 hours will strengthen your relationships with suppliers and relieve financial pressure. Moreover, readily available cash allows you to reinvest in your business and upgrade services.
Finally, seamless cash flow can help you reduce debt. You will manage to curb monthly financial obligations such as late payment fees and high-interest rates. In short, you’ll be more productive and focus your energy on clients rather than managing finances.
Are you ready for the quick settlement train? Elly welcomes both seasoned and new retailers looking forways to speed up the clearing procedure.
We are a payment processing provider offering superior solutions at affordable rates. Besides setting devices that accept multiple payment methods and run cashback promotions, Elly supports your store 24/7.
Reach out to our expert team to get a package tailored to your business needs. We’ll implement the entire process for you and help you get funds on your account in no time.