Date Posted: Friday, June 08, 2012
It's one of the basic rules of business - cash is king and cash flow is key. Which means that any system that can get the cash from the customer's wallet to the business's account quickly is a good thing, and why so many of the current banking systems, with their five day wait for credit card transactions and online payments to be processed continue to cause headaches for businesses in the twenty first century.
Which is why Square's move to give vendors access to their received payments on the next business day (Bloomberg) is so interesting. Let's put aside the technical questions on what they're having to do to achieve this, and look at it from a marketing angle. Card Service A gives you the money between two and five business days later, depending on variables you don't know, while Card Service B will give it to you the next business day.
For many small companies and sole traders, that there is enough to make them look seriously at B. Predictable cash-flow could make all the difference
And this is where the coming of age of Mobile Money services can become a force for change in the banking sector. As more merchants see the benefits and speed of a mobile money system that is aggressively going after customers by delivering them tangible benefits, the major payment houses are going to have to look carefully at their product and react to the start-ups coming into the space.