Understanding Funding Time for Your Payments

So, you’ve entered a few payments in PaySimple, but when will you get your deposit? Understanding the flow of electronic payments will help you project future deposits as well as reconcile your PaySimple reports.  The time it takes a transaction to complete the payment cycle depends on the payment method being used and when the payment is entered.  Check out our breakdown below for a general guide to tracking your deposits.

Credit card funding cycle and deposit timeline

Credit Card Funding Cycle
Credit card transactions follow a three-step funding cycle: Initiation Day, Effective Day, and Settlement Day.  The PaySimple solution tracks the status of your payments and also estimates the settlement date, or day you would expect to receive the deposit in your bank account.  The funding cycle only accounts for business days and non-banking holidays, so keep in mind that weekends and holidays* will add an extra day or two to the funding cycle.  It is also important to note that transactions are batched to your credit card processor at 11pm ET every night, so any transactions entered after 11pm ET will be included the following business day’s batch.

Visa, MasterCard, and Discover transactions follow the three-step funding cycle, and deposit on the third business day.  For example, a Visa transaction entered on a Monday before the batch closes would settle and deposit to your bank account on Wednesday.  All transactions entered on the same day will be deposited together in one lump sum on the settlement date.

American Express transactions require one extra step in processing, and therefore have an extra 1-2 days of funding time.  You can expect deposits directly from American Express 1-2 business days after the settlement date in PaySimple.**

ACH Funding Cycle
The ACH processing cycle is known as “three-day funding,” referencing the three business days of verification each transaction undergoes.  This three-day process ensures that your business does not receive any deposits for payments that haven’t been verified by your customer’s bank preventing your ACH processor from having to go back into your bank account to debit funds that are later returned as unavailable. This is the most efficient process to receive payments for electronic checks.

The day a transaction is entered is known as the Initiation day, followed by three business days of funding before the transaction is deposited.  For example, an ACH transaction entered on a Monday will process on Tuesday and Wednesday, settle on Thursday, and deposit to your bank account on Friday.   As with credit card transactions, the PaySimple system will track the status of the payment each day and provide an estimated settlement date for easy projections of your upcoming deposits.

ACH batches close at 5pm ET, so any transactions entered after that time will be included with the next day’s batch for deposits.  Like with credit cards, all transactions entered on the same day will be processed and deposited together, however you’ll receive the deposit for your ACH transactions the business day after the settlement date.

Voiding and Refunding
If you need to cancel a payment, you can do so the day it is entered before the batch closes.  This means you could void a credit card transaction before 11pm ET and an ACH transaction before 5pm ET on the initiation day.  PaySimple will only display the Void option in your account when it’s available.  If you miss this window to void, you can refund the transaction once it settles.  PaySimple will only display the refund option when the status of a transaction is settled; this prevents your business from being able to send funds back to customers that haven’t yet cleared.

There are many moving parts in the world of electronic processing, and PaySimple is here to make this as seamless as possible for you!  Knowing when you will receive your funds is crucial to any business owner, and we hope PaySimple can take the guessing out of this part of your day so you can focus on what you love doing – growing your business!

Check out the other sections of PSU for more insight into ways PaySimple can help you streamline your business and put time back into your busy day!

*Note:The exact date of bank holidays change each year. For a list through 2017, see this table from the Federal Reserve Bank of Atlanta.
**You may receive American Express deposits in the standard three-step funding cycle with your V/MC/D deposits if your merchant account is provisioned with One-Point American Express Merchant Account.  If you’re not sure what type of American Express account you have, please contact our Customer Experience team.

Subscribe to the PaySimple blog for small business insights delivered straight to your inbox.

Copyright © PaySimple 2005-2017. All rights reserved. PaySimple is a registered ISO of Fifth Third Bank, Cincinnati, OH and is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA.