In simple terms: Next Day Funding has the card processors release funds into a merchant account, which typically would take up to 2-3 business days. Some industries rely on a consistent cash flow, and the processing times some payment providers can take can be fatal. The process itself is dependent on communication between the merchant acquiring bank and the customer’s bank – which could take time depending on the type of transaction. 

Card processors developed a Next Day Funding scheme to mitigate the issue of inconsistent cash flow. The scheme ensures that funds can be released as expected. Doing this allows the lifeblood of the business, cash flow, to be used to maintain payroll and allocated budgeting for suppliers and contractors. 

Due to the speed of releasing funds early, most payment processors demand an increase in fees to allocate the resources necessary. SMEs should not have to be charged extra for the privilege of accessing their profits.