When it comes to the world of finance, many of its terms are shrouded in mystery to the everyday person: acquiring, chargeback, bull market… the list goes on. At Truevo, our aim is not to befuddle, but to empower with real-life insight and guidance. So, in this blog post, we’re going to dive into an aspect of ecommerce called the “merchant payout cycle” or “settlement period.” Simply put, it’s the process through which online shop owners access the funds from payments made on their websites.
First things first, it’s important to note that every payment provider (like us) operates differently, so whatever you read here shouldn’t be taken as an absolute guarantee or blueprint of how things work. This post is a guideline about what to expect about how this process generally plays out.
What’s in a name?
Like so many technical terms, there is normally a simple explanation behind them that we already know and can understand. For instance, there are several factors that make up a successful purchase on an ecommerce site. Cardholders and payment card schemes and acquirers are all terms that describe people and services we engage with on a daily basis; a payment card scheme is simply the card company and its rules (like ubiquitous Mastercard and Visa), a cardholder is any person with a card, and an acquirer is the payment provider (like us) who processes payments on behalf of merchants (like you).
A payout cycle is no different. Its meaning boils down to: how do I get paid, and when will it happen? As touched on above, multiple things need to happen before money becomes accessible. Across global networks and authorisation processes, safety features and protocols are activated to make sure that each payment is made securely. We use 3D Secure 2.2, the world’s premier system to authenticate card payments.
Knowledge is power
While it’s all well and good that payments are made safely, you’re in business to make money. It’s important to know your payment provider’s payout cycle. On average, it takes between three and seven working days to receive funds into one’s account. Sometimes it can take less time than that, but there is often a fee attached for the expedited processing.
At Truevo, our payout cycle varies, but takes up to four days after a request for withdrawal. This gives us enough time to authenticate and securely process each transaction with the additional buffer of potential requests for refunds or chargebacks. Sometimes payments need to be reversed and the related protocol needs to be adhered to. There would be considerably more hassle and complication for everybody involved without these buffers that are designed to make payments easy and safe.
Information about payout cycles is not always easy to find, but it is something you should know about, especially as a merchant whose livelihood depends on the sales made on their site. If you don’t have all the information you need, get in touch with your support payment provider’s support team. If you don’t get an answer or like what you find out, you know where to go.