Paul Sawers was a reporter with The Next Web in various roles from May 2011 to November 2014. Follow Paul on Twitter: @psawers or check h Paul Sawers was a reporter with The Next Web in various roles from May 2011 to November 2014. Follow Paul on Twitter: @psawers or check him out on Google+.
PayPal has announced a new Next-Day-Settlement (NDS) service that allows eligible businesses to transfer money from their PayPal accounts to their bank accounts within 24 hours.
The pilot program is only available in the US for now, and PayPal is a little cagey on what it means by “eligible businesses,” however it does say that if your business qualifies for the program, you will already have been notified.
Traditionally, PayPal takes 3-4 business days to fully transfer funds from a merchant’s account to their bank, as it uses an electronic network called Automated Clearing House (ACH) to shift groups of transactions between institutions. Though the money is debited from your PayPal account immediately, you generally have to wait before the money is accessible from your bank, as it doesn’t physically have the cash in-hand right away.
For individuals who sell things on eBay, this delay may not be a huge issue if it’s just spare cash. But for companies with cashflows to worry about, 3-4 days can be a long time to wait. So it makes sense that PayPal is making moves in this direction, even though the initiative is still restricted in its scope.
PayPal doesn’t reveal too much about how it’s now able to turn things around within 24 hours, but it does say: “We’ve been working with our banking partners to optimize processes on both their end and ours so that we can make the 24-hour transfer a reality.”
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