What is float in payments? Money in transit explained
By SendPay Business · · 2 min read
Float is money that has left one place but hasn't reached the next yet. For a moment it is in transit: gone from the payer's account, but not yet usable by the person being paid.
Where float comes from
- Cheques: the time between a cheque being written and the money clearing.
- Card payments: the gap between a sale and the merchant being paid out.
- Transfers: payments sent by slower systems, such as Bacs, which takes about three working days.
- Prepaid balances: money customers load in advance and spend later.
Who holds it
While money is in transit, it sits with a bank, card processor or payment firm. In the past, banks could earn interest on float, which is one reason slow payments lasted so long. Payment and e-money firms in the UK must safeguard customer money while they hold it.
Why float is shrinking
Instant systems like Faster Payments in the UK and SEPA Instant in Europe move money in seconds, leaving little or no float. That is good for customers and businesses, who get their money sooner, and it is why many people now expect every payment to be instant.
Where SendPay fits
SendPay platforms give your customers GBP, EUR and USD accounts, transfers, payment links and branded Visa cards under your own brand, powered by licensed partners.
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How much of my money is stuck in transit?
Enter what you take a month and how many days it takes to arrive, and the free calculator shows your float and what it costs you a year.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.