Merchant Service Providers Must Embrace Instant Funding to Stay Competitive

May 23, 2019

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 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.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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