Merchant Cash Advance – Processing, Pros and Cons

A Merchant Cash Advance (MCA) or Business Cash Advance is a loan variety that lends money to companies and start-ups promptly and efficiently. Business financing options, along with short payment terms of generally 24 months and regular recompenses, paid on each working day, characterize the MCA. The system opposes the usual larger monthly payments of traditional bank loans and associated longer disbursements terms.

Overall, MCA may be used to describe short-term business loans and future receivables of credit card sales. This type of financing is available to businesses, having stable and continual credit card dealing, including restaurants, retail stores, pharmacies, etc.

How Does A Merchant Cash Advance Work?

The process of getting a merchant cash advance is generally a quick one. The foremost step is the identification check of the business that wants the loan. The documentation needed for it include:

Government-issued identity proof
Bank and credit card statement processing
Business tax returns
Once the identification approval is processed and done with, it is only a matter of days before the business receives its borrowed amount. Subsequently, they receive a lump sum amount and pay it back through sales generation to customers.

To pay back the loan amount, the borrower offers a percentage of the sales, as specified in the contract, to the lender daily. It may also be done through the connected merchant account, calculated based on sales processed through debit and credit card. In this case, cheque and cash sales do not count in the daily quota.

The compensations can also be taken directly from the borrower’s bank account through Automated Clearing House (ACH) payments. By this logic, small-scale businesses with low credit and debit sale rates can also qualify for MCA if they opt for ACH repayments.

Borrowable MCA amounts range from a few thousand dollars to over two hundred thousand dollars. Irrespective of the rented sum, the payback time is usually very brief. In most cases, it is about 18 months or so.

Pros of MCA:

MCA has several benefits, some of which include:

An Effortless Application Process: MCA entails a quick application process, and money borrowing is possible in a day. It is also easy to qualify as, in this case, loan credit history is less significant than sales history.
Flexibility: MCA allows numerous payment plans and methods and permits the borrowers to use the funds as they see fit. Since the payments depend on a percentage of daily transactions, the debtors do not have to pay back if they have low income. It results in cash flow issues that can lead the business to deeper debt.
Absence of collateral: MCA loans are unsecured, meaning that it does not tie the borrowers to any collateral. For businesses with limited assets, this feature is a godsend.
Cons of MCA:

The disadvantage of MCA encompasses:

Potential Cash Flow Problems: MCA requires a specific amount of the borrower’s future sales dedicated to paying back the borrowed amount. This results in cash flow issued that can lead to a deeper debt for the business.
Comparatively Higher Costs: The cost to get an MCA, as factor rates and not interest rates, is much higher than many other types of funding. Factor rates do not depend on a specific period, and thus, paying off in advance does not help save money.

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The Rise of Online Payment Gateways

The cashless payment system is growing exponentially with evolving payment methods, rising e-commerce use, enhanced broadband connectivity, and emergence of new technologies. Can increasing incidences of cyberattacks and spams hamper the growth of online payment market or will it continue to grow at a rapid rate?

The global digital payment industry is expected to hit the USD6.6 trillion mark in 2021, registering around a 40% jump in two years. The cashless payment methods are rapidly evolving with ground-breaking innovations such as mobile wallets, peer-to-peer (P2P) mobile payments, real-time payments, and cryptocurrencies. In the growing digital age, many payment technology companies are collaborating with traditional financial institutions to cater to the latest consumer and merchant preferences. Due to enhanced broadband connectivity, increasing mobile commerce, emergence of new technologies such as Virtual Reality, Artificial Intelligence, and rapid digitization, billions of people have started embracing contactless payments in both developed and emerging countries. Besides, surging e-commerce businesses, digital remittances, digital business payments, and mobile B2B payments are boosting the non-cash transaction ecosystem.

Cashless transaction method users across various generations are widely adopting the digital peer-to-peer (P2P) apps as they are more appealing and flexible to use. In-app payments or tap-and-go transactions take seconds at the checkout and allow users to make payments anytime and anywhere. Tokenization, encryption, Secure Sockets Layer (SSL), etc., offer multiple ways of securing payments while enabling digital transactions. Moreover, the users do not have to fill in information every time to complete the payment process. Thus, online payment gateways play a crucial role in the economic growth, enabling trade in the modern economy. With social distancing rules in place, digital payments have become an obligation for contactless transactions rather than just a transaction alternative to prevent the spread of coronavirus.

Digital Commerce Empowering Businesses
Electronic payment systems have become a crucial part of businesses as consumer inclination towards online shopping is expanding. With broadening internet penetration, increasing use of smartphones, and diverse options for e-transactions, most consumers are preferring online channels over traditional brick-and-mortar stores for shopping. Therefore, businesses are shifting online with an electronic payment solution to maximize their profit earnings. Automating the electronic payment system eliminates the scope of errors and saves a considerable amount of time and effort. High standards for detecting and preventing fraud in digital transaction systems and AI-based fraud detections protect users from security breaches. By providing the flexibility for making payments through credit/debit cards, mobile money, e-Wallet, etc., the businesses can expand their customer base. The electronic payment process improves customer satisfaction as customers do not need to count cash or deal with paperwork whenever they want to make the transaction.

Biometric Authentication Enhancing Security
Biometric authentication involves recognizing biometric features and structural characteristics to verify the identification of an individual. The verification method can involve fingerprint scanning, facial recognition, voice recognition, vein mapping, iris detection, and heartbeat analysis. With the rise in identity theft and fraud, biometric authentication has become a reliable and secure alternative for making digital transactions. According to a recent research, biometrically verified mobile commerce transactions are expected to constitute a massive 57% of the total biometric transaction by 2023. Biometric payment cards are also becoming popular as they support tap-and-go payments, allowing users to make faster digital transactions. The digital payment technology provider, Worldline is partnering up with the French FinTech, A3BC (Anything Anywhere Anytime Biometric Connection), to protect mobile phones from intrusion with a two-factor authentication process. The combined solution eliminates identification through a single touch, rather it recognizes fingerprints through a picture of the hand. MasterCard is planning to bring FinGo’s vein-scanning payment solution that facilitates users to authenticate transactions.

Dominance of Mobile Wallets
In 2019, mobile wallets overtook credit cards to become the highly adopted payment type globally. Digital wallets offer flexibility to users to store multiple payment methods in one digital home and turn cash into electronic money required for online or in-store purchases. Financial institutions have already started to embrace the digital wallet trend by offering virtual cards to business customers. The virtual cards stored in digital wallets consist of details like 16-digit card number, CVV code, date of expiry and work just like the physical plastic card. Currently, only 37% of merchants support mobile payments at the point of sale, but with the rising adoption, merchants are willing to invest in technologies facilitating digital wallets. The virtual wallets can save money due to low processing costs as they limit transaction values and frequency. Artificial Intelligence (AI) is improving the user experience with regards to transactions with ChatBots, designed to execute and robotize essential exchanges as per the user’s interest. Besides, cryptographic money-based e-wallets are being embraced by new companies to small-medium organizations for storing digital money. Smart voice technology is contributing to the growth of smart voice wallets ever since Amazon propelled the principle of this platform, which is now being followed by Google and Apple.

E-Commerce Boom Accelerating Digital Payment Market Growth
E-commerce growth at an exponential rate is creating shock waves, and the sonic boom is reverberating across the FinTech sector. The growth of many e-commerce companies is driven by the kind of financial services they provide. Digital transactions make it convenient for the buyer and seller to make transactions and remain loyal to the market space. The COVID-19 pandemic added a different dimension to e-commerce innovation, introducing newer trends such as payment alternatives at checkouts (not with digital wallets), virtual cards, QR codes, and other touchless transactions. Besides, the Buy Now Pay Later (BNPL) trend is dominating the e-commerce industry as it relieves the financial burden on the buyer. BNPL involves a soft credit check, so the consumers can buy what they need, keep the inventory moving, and pay overtime without affecting their credit score. BNPL provides businesses with much-needed liquidity and greater flexibility at the checkout.

Influence of COVID-19 Pandemic on Digital Payment Market Growth
Digital payment systems have moved beyond their peer-to-peer (P2P) transfers and bill payments. The COVID-19 pandemic allowed digital payment systems to showcase their strengths, such as a strong understanding of hyper-local markets and its ability to establish strong local partnerships. Businesses and consumers increasingly “went digital” for providing and purchasing goods and services online. When the pandemic hit, people did not want to touch or exchange cash due to the paranoia of catching the infection from physical currencies. Several governments around the world introduced digital financial transfers to provide COVID-assistance. Owing to lockdown measures, consumers shifted to online platforms, which catapulted the demand for digital payment systems. Now, digital platforms have become an essential component of people’s lives, and consumers are more likely to continue shopping online in the post-pandemic period. The dramatic shift in consumer behavior is likely to augment the demand for e-payment systems even more. Therefore, companies are focusing their attention on digital mediums to meet the new customer demands and thrive businesses in the changing market scenario. Organizations are reimagining customer journeys to reduce friction and provide new security features. Payment companies such as PayPal and Square Cash are staffing up across the board to better understand the rearrangement of societal norms and stabilize the business in the near future.

e-Payment Systems are the Future
With increasing smartphone and internet penetration, consumers are becoming tech-savvy, which presents endless opportunities for the digital payment markets. Post-pandemic, digital payment systems are anticipated to continue to flourish over the years to come. While cards remain the first choice for payments around the world, mobile wallets are quickly gaining traction. The traditional cash flow is declining in bank branches and ATMs, demonstrating a power move towards a cashless society. Currently, China dominates the global mobile wallet consumption, followed by South Korea. However, there are still many countries that are highly dependent on cash due to lack of trust towards financial institutions and lack of proper broadband infrastructure, etc. In the near future, social media-initiated payments, biometric payments, voice-activated payments are likely to become mainstream in developing countries as well.

Cybersecurity and Privacy Concerns with Online Payment Solutions
Cybersecurity and privacy threats have become a troubling concern with the increasing incidences of online fraud. According to the Mastercard survey, one out of four consumers experienced some kind of fraud in 2020, ramping up the cybercrime rate by 49%. In the first half of 2020, online scams increased by 73.8% from 2019. However, adopting new-age technologies such as multifactor authentication, biometrics, 3D security, Artificial Intelligence, and Machine Learning can help control fraudulent activities such as phishing, virus attacks, etc. Shifting to contactless cards, QR codes, and tokenization can also help mitigate risks associated with digital payment solutions. Besides, sensitizing end-users about the secure application of e-payment solutions through amplifying efforts towards building financial literacy can help to prevent frauds. The emergence of mobile commerce and the evolution of e-payment platforms backed by robust security solutions can help to drive the goal of making the economy truly cash-less.

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Photo Correction Services — Making Raw Pictures Ripe

Photo editing is a modern concept that covers a lot of major editing tools and fixes the photo according to market standards. Photo correction is a very essential tool used to make photos every bit professional as well as presentable. Raw photos just out of the camera are not always perfect. A photo is modified on a lot of levels before being handed out to the customer. One of the basic editing, that almost all the photos go through is photo retouching. Sometimes, we do not like the color of the dress or sometimes it’s the hair that needs to be fixed, so photo retouching is something that you cannot go without. It covers various aspects like color correction, blurs, and brightness and retouching of various aspects of the frame.

When an offshore firm is approached for the job it encompasses all that is vital to make the picture look presentable from every angle. One of the major software programs that are used to make raw pictures look ripe is the Photoshop. The editor who works with the program will be able to identify the negative traits of the existing pictures. Then the process of rectification will be used. All corrections are replete with minor or major adjustment techniques. The tools in the software program are in built and with the experience the work is executed. Many creative wedding albums have been produced with this service. A color picture can be made into a sepia tone or a black and white without disturbing the other elements in the frame. It brings a nice retro feel to the pictures. Additionally new elements also can be added. For example some text can be used as caption too. It all depends on the client’s brief that will enable any editor to work.

Outsourcing the work is the best thing to do if you have a business that requires pictures to be corrected often. The editors are capable enough to understand a brief and bring alive the sentiment of the subject. Real estate firms need correct dimensions in their pictures. Professional editors can do the job with precession as they are used to calculating the right frame edges. They can also remove the distortions, which also come under photo correction services. For example a building may be shot with a wide angle and may not give a correct picture to the buyer on the website. To ensure that it is not misleading the professional will amend the picture with the right angle. When the property is displayed in the right manner the buyer will be more interested in purchasing it. All the blemishes are also removed to highlight the best details. So even if the horizontal or vertical frames are skewed the end result is near perfect.

Photo correction services are everything about bringing out and highlighting the right feelings behind a photo. It is not always about fixing the errors but mostly it is about adding beauty to a moment that is very precious and already beautiful. It aims at making the photos every bit better and presentable.

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