Eight Ways to Save Money - Method #5

Settle Batches On Time

First lets start with some key definitions:

Batch - The
accumulation of captured credit card transactions in the merchant’s terminal or
POS awaiting settlement.

Settlement - The process of sending a merchant’s batch to the network
for processing and payment.

Many merchants are unaware they have to settle transactions
or batches with in a specific amount of time after authorization to avoid
downgrades. The maximum period varies depending on your type of business,
transaction type and method used to capture the transaction. Most
transactions have a period of two days to be settled. However, there are
exceptions such as a business set up to transact mostly Card Not Present (CNP)
transactions involving the shipment of goods. These businesses have seven days
from the date of authorization to submit settlements before downgrades begin.

The general rule is the longer you wait to settle your merchant account the
more likely downgrades are. Downgrades always result in higher fees and
less profit for the business.

What You Can Do

Ask your payment processor to help you understand the cutoffs for the most inexpensive settlement periods for the type of transactions your business typically has.
Because settlement periods can vary, make it a habit and a standard operating procedure to batch and settle transactions as soon as possible after authorization. Most of my clients are set up for auto settlement at the end of each business day. If you are not shipping times days after the authorization I suggest setting your terminal or POS for automatic settlement commonly called "auto batching."
Periodically verify your phone/data lines on your terminals work correctly. Malfunctioning data lines can sometimes result in settlements being held up beyond the expected settlement window.

Like this post? Then subscribe by RSS | Email