Industry businesses frustrated by the three day time period for card transactions to be settled are being offered a new payment solution that promises to quicken the process without increasing the cost.
Mobility firms operating on fine margins know all too well the annoyance of having to wait days for payments to be settled while banks handle the money but a retail consultancy is aiming to challenge the norm.
MG Retail Consulting, which offers payment solutions to SMEs, has launched next day settlement through merchant services in response to a perceived growing demand.
Mike Glynn, from MG Retail Consulting, said that retailing has become more challenging over the last year with continually increasing running costs and squeezed margins.
He argued that it is therefore “critical” for small businesses to make the most out of every transaction from the value of the goods through to the amount they pay to facilitate the sale.
He said: “Money transactions more often than not have hidden charges in the small print but now there is a new breed of a financial institution.
“These are financial technology companies, also known as fintech. They use state-of-the-art technology to handle transactions more quickly at a lower cost.”
Glynn asked why in the digital age it still takes three days to transfer money, clear a cheque or settle a stock deal.
He said that with high-speed internet, digital technology and seven days trading, banking technology has not kept pace with its advancement.
“The terms risk and due diligence policies are held up as the reasons for slow adoption, not computerisation.”
Ian Marshall, from Quora, said that these delays allow the banks to enjoy the “float” of retaining funds.
Glynn added that businesses ultimately end up paying for the banks’ inefficiencies.
MG Retail Consulting’s services let retailers that currently wait for funds from card transactions access next day settlement, improving cash flow.
Glynn concluded: “In the currency market for both private individuals and small businesses, there is a more reliable and speedy online system.
“Costs are transparent and cost-effective allowing you, the user, more control of your funds as well as reducing your fees.
“[SMEs] and individuals usually get a bad deal when it comes to currency conversions, and lower overheads mean that significant savings are passed on to customers.”