When it comes to getting their money, businesses and consumers want it fast and convenient. No one has time to wait, and if they can’t get it when they want, they will go elsewhere.
There is no loyalty in payments, and a new report proves it.
In the U.S. economy, business-to-consumer disbursements have traditionally been made via mailed checks or using ACH, according to Business to Consumer Disbursements in the U.S.: The Small Business Opportunity, a report by consultants, Aite Group.
Checks cost businesses too much and ACH isn’t fast enough for consumers who want on-demand services. As the U.S. moves to a real-time payment infrastructure, businesses need to move away from ACH and checks to real-time instant funding to meet consumer demand across use cases, according to the report.
Merchant acquirers or small business lenders that don’t offer instant funding are going to have a tough time keeping customers.
Why Small Businesses Should Consider Instant Funding
Many small businesses have to worry about cashflow problems. The report shows that 57% of participants had to borrow money to pay for payroll or other expenses. With instant funding, it eases small businesses financial management challenges.
Additionally, 85% of responders said they would end their relationships with current acquirers so they could work with one that offered instant funding.
Currently, most organizations use a more traditional pay model, known as a pull payment. Under this model, a buyer receives an invoice from a seller or supplier, approves the invoice and then provides his/her credit card number to the seller for payment. The seller processes the payment, and then the buyer settles the payment amount with the invoice amount. It can take a day or more for the payment to clear in the seller’s account.
Other Perks of Instant Funding
With instant funding, the buyer maintains complete control of the transaction. Since the person’s card number is never shared with sellers, the individual cuts down on the risks of fraud and identity theft. Other benefits include:
- There’s no waiting for payment reconciliation because its automatic
- Payments are completed faster and more efficiently
- The buyer ensures that the amount charged matches the amount paid
The Last Word on Instant Funding
Businesses and consumers have already gotten a taste of instant payments thanks to platforms, like Venmo and Zelle. Now, is the time for acquirers that step up to the plate offer instant funding will be giving businesses, especially small businesses and startups, more of what they want – a larger pool of options and satisfying their needs for real-time digital payments. Getting assistance with their financial management duties through instant funding will be priceless for small businesses.
The public demand for having things now is not going to decrease anytime soon. Payment providers that recognize this and do what they can to meet their preferences will reign supreme among the others that ignore it.
Apply Now for Merchant Services
If you need a merchant account or other payment solutions, then consider turning to eMerchantBroker.com. EMB offers customized solutions for all types of merchants, including high-risk businesses. EMB’s online application process is simple and easy. Apply online today to find the solutions you need.