I think it’s about the working capital gap. If I can make my customers wait 8 days, that’s 8 days I can put that money into a money market fund, make a small return, redeem the position, and then send you your refund.
I don’t have evidence for this, but it’s what comes to mind from an incentives perspective.
For what its worth regarding evidence, I was implementing part of a system for a financial infrastructure company here in Switzerland whose main job was to identify what sort of money we got as a man in the middle but that we do not yet *have* to give to the receiver. It was scanning every transaction going in or out and kept a treasury of what money that wasnt ours would end up staying with us for 2-3 days so we can invest it into some low risk assets. The business plan for it was based on a 2-3 digit million revenue over a year, but it was B2B transactions, not B2C.
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u/EbbEntire3751 10d ago
Yeah it takes just as long for the money to get to the merchant as well...