Merchant account companies are essentially cyber-banks assigned to temporarily retain funds acquired by merchant customers. Each time a seller completes a credit card transaction, the funds will automatically move into a merchant account. Before the seller can access these funds, they must remain in the account for a set time period. In most cases, money sitting inside a merchant account clears within a couple of days to a week.
Retailers accepting credit cards can expect the sales from these cards to post immediately. The type of credit card processing system determines the actual clearance time for these funds. Dedicated merchant accounts will free up funds faster since these accounts are set up for one exclusive retailer. Aggregate processing accounts may not clear funds for 5 to 7 days because these accounts service a significant number of retailers.
Every business establishment wishing to accept credit cards must deal with merchant card processors. Avoiding the delay time between making a sale and receiving funds is not possible due to the agreement terms. This temporary hold may inconvenience some sellers, but having this payment option allows them to attract more customers. Dealing with this delay is a necessary nuisance for the individuals who want to increase their bottom line.
Most sellers may prefer dedicated accounts over aggregate accounts because of the shorter holding requirements. Dedicated merchant accounts also allow sellers to manage their money easier. Any person seeking to obtain a dedicated account must prepare to undergo a strenuous vetting process. Credit card processing companies will usually perform credit checks and financial evaluations on every candidate requesting an exclusive account.
Aggregate accounts may have longer hold periods, but they are easier to obtain and ideal for small businesses. Merchants who have no credit history or assets can accept credit cards with this type of account. These arrangements are inclusive, and they offer little control to the seller, but small businesses can use them to build a customer base by being flexible at the onset.
At maximum, it should only take 7 days for merchant account companies to post payments to customers. This may seem like a lifetime to some business owners, but it is a safe and fair way to clear funds effectively. Established businesses can always choose dedicated accounts to reduce waiting periods. Patient sellers running small businesses will do just fine with aggregate accounts.