Payment Funding Schedule
Introduction
Two common payment options, credit/debit cards and ACH (Automated Clearing House) transfers, each have their own distinct processing schedules. While card payments offer near-instantaneous processing, ACH transfers take longer to complete. This article will explore the differences between card and ACH funding schedules, breaking down the factors that impact timing, and what you can expect in terms of processing speed and settlement.
Card Funding Schedule
| Day | Action | Timeframe |
|---|---|---|
| Day 0 (Transaction Date) | Payment is made (card swipe or entry) | Instant processing, or near-instant |
| Day 0-1 (Transaction Date) | Authorization & verification occur | Instant, typically within minutes |
| Day 1-2 (Processing) | Funds settle from payer's account to payee's account | Usually within 1-2 business days |
| Day 2-3 (If weekend/holiday) | If it's a weekend or holiday, settlement may be delayed until the next business day | Settlement may occur the next business day |
Example
Monday (Day 0): Guest makes a payment using their credit card at 10 AM.
Monday (Day 0): Payment is authorized instantly.
Tuesday (Day 1): Funds are transferred from your account to the merchant's account (1-day settlement).
Wednesday (Day 2): Final settlement and completion.
Timing Factors
Holidays: Bank holidays will delay your deposits by one day.
Weekends: Card transactions can often be processed on weekends or holidays, but settlement may not occur until the next business day.
ACH Funding Schedule
| Day | Action | Timeframe |
|---|---|---|
| Day 0 (Transaction Date) | ACH payment initiated (e.g., direct debit or transfer request) | Transaction initiated |
| Day 1-3 (Processing) | ACH funds move from payer to payee's bank account | Usually 1-3 business days |
| Day 3+ (Weekend/Holiday) | If transaction is processed during weekend/holiday, it may delay settlement | Delay until next business day |
Example
Monday (Day 0): A client initiates an ACH payment to you at 10 AM for a service rendered.
Tuesday (Day 1): The ACH transfer is processed by the payer's bank and begins its journey to your bank.
Wednesday (Day 2): The ACH payment arrives at your bank and enters the processing queue.
Thursday (Day 3): The payment is successfully deposited into your account and available for use.
Timing Factors
Holidays: Bank holidays will delay your deposits by one day.
Weekends: ACH payments are not processed on weekends, so a transaction initiated on a Friday would likely not start processing until the next Monday, with settlement possibly delayed by an additional day.
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