PayPal Now Offering Next Day Settlement

Starting this month, PayPal will be offering Next-Day Settlement (NDS) for eligible businesses in the U.S. as part of a pilot program.

With NDS, businesses transferring money from their PayPal account to their bank account will have access to that money within 24 hours of the transfer.  This is opposed to three to four business days companies used to have to wait to see the money appear in their available balance.

“As long as you make your transfer by 5 p.m. local U.S. time, you’ll have access to your money quicker than ever before. Again, we’ve heard your concerns so 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,” PayPal’s Lead Product Manager for Money Management Steven Chien noted on the company’s blog.

The new NDS program is part of a total package of enhancements PayPal has rolled out over the last year-and-a-half for its small business users. In the fall of 2013, PayPal introduced PayPal Working Capital in partnership with WebBank to help small companies fund their businesses. In June, the payments company introduced the newest batch of updates to the online business account experience so that SMBs can manage their funds more easily.

“We’ve also been listening to what our customers and business partners want so that we can address real issues head on. And, our business partners have been telling us that they want more control over their money. So, we’ve heard you,” Chen said.

Businesses eligible for Next-Day Settlement program have already received notifications informing them that they can opt in.

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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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