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Question: 1 / 400

What should a large retailer do to delay payment of credit card fees the longest possible?

Accept gross settlement

Delaying payment of credit card fees is a strategic decision that can impact a retailer's cash flow. Accepting gross settlement allows the retailer to receive the full amount of sales minus the credit card fees directly from the consumer's transaction, without those fees being deducted immediately. Thus, the retailer can hold onto the sales revenue longer, delaying the outflow of cash that represents the credit card processing fees until they are settled later in the process.

This approach works effectively for managing the timing of cash flows, as the retailer retains control over the funds generated from sales, allowing them to utilize that cash for other operational needs or investments before those fees are actually deducted.

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Place a hold on consumer credit limits

Receive net settlement

Delay funds transfer to card-issuing bank

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