Access to card payment funds is increasingly important for small businesses to get by. A fast cash flow helps companies afford urgent expenses and gives the reassurance that money is in the bank if finances suddenly tighten.

Why at all wait several days for funds to reach your account? A normal settlement time is 2-4 working days for most card machine transactions, if you want to avoid payout fees. Foreign cards like American Express and ecommerce payments can take longer. It all depends on your chosen card processor.

Recent years have nevertheless seen payment companies develop new funding methods. For example, fast settlement in an online account linked to a prepaid card is getting more popular.

Let us look at the different ways you can access funds soon after accepting a card in person, remotely or online.

How card payment settlement works

Whether you accept credit and debit cards through a card machine, website or other online solution, the payment goes through a series of checks and processes to authorise the transaction in a matter of seconds. When the customer’s card is immediately charged, the final part of the transaction starts: settlement.

Card settlement is the time it takes for a payment to reach the merchant’s business account from when the customer completes the transaction. During this period, funds are inaccessible to the merchant, as they temporarily reside in a so-called merchant account (provided by an acquiring bank).

In the merchant account, the transfer of funds is processed by the acquiring bank. When it reaches the merchant’s bank account or current account, the act of clearing the money may extend the access to funds further.

This whole process typically takes a few days, but it doesn’t have to take this long.

Receiving money in your bank account

To access funds quicker than a few days, some payment providers offer instant or next-day settlement in your bank account. Normally, this adds a fee on top of your normal transaction charges, while slower settlement is typically free (apart from transaction fees).

For example, Square offers instant transfers to your bank account for a 1% fee added to its fixed transaction rate. You then receive card transactions within 20 minutes of processing a card from a customer.

An increasing number of merchant service providers, like Takepayments and Dojo, offer free next-day settlement. Some of them only process these on weekdays, while others do on weekends and Bank Holidays too.

Online account payouts generally faster

Another trend among payment companies is to offer an online business account where payments settle immediately or the next day. Such an account is not a bank account, but typically has the functions you need in a business account as well as a prepaid or debit card allowing you to spend the funds right away.

A famous example is PayPal Business that includes an e-money account online, linked to Zettle Reader (optional) and online payments. You don’t automatically get a card with this, but you can apply for a Business Debit Mastercard for instant access to funds accepted through PayPal.

myPOS offers a similar solution that accompanies its card terminals: an online e-money account where funds settle immediately. Every card machine comes with a Prepaid Visa card, and you can order more for staff members to use in shops and online.

Some card reader companies have started to offer their own online business account with an accompanying card, such as SumUp Business Account where card reader payments clear the next day, weekends included.

If you primarily need a business account, but still need to accept cards in person and online, then Revolut for Business gives you next-day settlement with a host of cross-border banking functions, but limited card reader functionality.

Options for bigger businesses

Fintech platforms and certain big companies can get a special arrangement with card schemes directly for tailored access to funds.

For example, Visa Direct is a customisable solution you can implement in your product to allow your clients to receive funds instantly. This has been used in marketplace platforms like Mercari and on-demand delivery platforms like Postmates – clearly not small, simple businesses.

Adyen, an online payment platform for larger businesses, also offers fast funds within 30 minutes, but this needs to be set up by a developer through APIs.

Then there are fintech companies that offer alternatives to traditional card payments. For example, Brite has a way for online companies to facilitate instant bank transfers across borders through an online checkout. Again, this is not geared towards smaller businesses.