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  • Writer's pictureSam Bosch

Time is Money

October 10, 2016

The proverb “time is money” voiced by Benjamin Franklin almost 300 years ago is shorthand for expressing that time is a valuable resource; therefore, it is best to do things as quickly as possible. It especially applies to the value of cash. A dollar today is worth more than a dollar next week, or even tomorrow.

A step in the direction to move funds quicker has just been made by the Automated Clearing House Network, known as ACH. Direct routing of money to and from bank accounts can now happen the same day rather than a one- or two-day delay. (With weekends having a holiday on a Friday or Monday the delay can be four days.)

But this new ACH feature is still a “batch”. It allows “credits” a couple of extra windows every day – 10:30 AM ET and 2:45 PM – along with the traditional overnight window.   This is an improvement, especially for businesses on the East Coast but on the West Coast these times translate to 7:30 AM and 12:45 PM, just the first few hours into a business day so they are still faced primarily with next-day credits.

Currently when a merchant makes a sale, either with cash or with plastic the receipts of the sale are not available to the merchant to actually use for some period. Cash sitting in cash drawer or drop safe is dead money; other than paying to for CODs it is no value to the merchant. Cash must be physically deposited into a bank account which takes some time and processing effort. Moreover, banks can charge cash-counting fees diminishing the value of a sale.  

For card transactions, in addition to processing fees which also diminish the value of a sale there can be business-day delays for crediting the merchant’s account and there are charge backs which postpone the funds of a sale

The ACH’s goal is to provide real-time money transfers similar to Canada’s Interac, which it plans to have in two or three years. But those of us in the ATM and Smart Safe business relate to the old joke that goes: “God, give me patience, and I want it right now!”

Today lightning-fast trading systems operate in milliseconds but sending and receiving money from a bank is still slow. But the optimists in the financial-services industry, of which I am one, strongly believe with all the technologies, hardware and software, currently available new time-is-money offerings will be available in months, not years,and merchants will be able to use with on line banking the cash from a sale to pay bills or collect interest within minutes if not seconds.


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