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I need cash fast.. But how?
"I need cash fast.. But how?"

Payout times

The time it takes to transfer money from one bank to another is dependent on the system’s conventions utilized in transferring the funds and how the two players (sender and receiver) share the risks in case a fraud occurs. The following are key issues that relate to payout time:

Automated Clearing House (ACH)
The majority of all lenders and transfers between two banks process their transactions via an Automated Clearing House (ACH) network. This special network was developed to provide an alternative to routine checks in 1970s.

Settlement time
If your lender uses the right bank to initiate a transfer through ACH, it only takes one business day, provided that your lender meets the cutoff time for that day. Most of the banks process ACH transactions in the evening, so that’s the cutoff. Any delay beyond one business day caused by the bank is used to initiate the transfer.

Risk management
For many years, fraud has been a major challenge for all ACH transactions. And the main reason has been that ACH transactions, particularly those relating to debit ACH transactions, can easily be reversed. When a lender initiates an ACH debit transaction, the sender might not know if such a bank account has enough funds or, worse still if it exists in the first place.

Instead, the receiver of the ACH request in question can reject the transaction due to insufficient funds and customer disputes. It’s important to note that while nearly all ACH returns are completed within 24 hours, some can take as much as 60 days especially if a customer dispute is lodged .This exposes the originating bank to a big risk throughout this period.

So, what’s the future?
The urge of financial institutions to make ACH processing faster when doing bank to bank fund transfers has been limited due to the following reasons:

  • Most banks believe that if more time is allowed between the transaction initiation and transaction settlement, fraudulent transactions will be minimal
  • Banks are of the view that some transactions can be scheduled (in an advance date) and settled on the desired time/date
  • ACH transactions don’t generate much revenue as compared to wire transfers and credit card payments

Weekends and public holidays
Most lenders remain closed on weekends and public holidays. Therefore, you are unlikely to secure a loan during these times.

Author - Matthew

Writer & researcher -

With 8 years of experience Matthew Miller has written financial content and guided Internet visitors to the right financial products. With a board contact network of experts Matthew creates authoritative guides and advice articles. Read more »

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