Envato and interest on accounts :)

i never keep money in my account, when i buy something i deposit, and its used right away.

Depending on legal and financial regulation they can’t earn interest. Envato is not a registered bank and to earn interest they must invest it (a savings account is investing and involves risk). Depending on how their merchant accounts and payment processing integrations are setup they may not be able to do this realistically or legally.

On the other hand, Envato probably has a large enough cash reserve to cover all buyer/author balances in the event of a margin call and it may even be required to do so. This differs from country to country.

GravityDept said
Depending on legal and financial regulation they can’t earn interest. Envato is not a registered bank and to earn interest they must invest it (a savings account is investing and involves risk). Depending on how their merchant accounts and payment processing integrations are setup they may not be able to do this realistically or legally. On the other hand, Envato probably has a large enough cash reserve to cover all buyer/author balances in the event of a margin call and it may even be required to do so. This differs from country to country.

It’s called “insurance” not cash reserve.

No company in their right mind would sacrifice their own out of pocket money in case something bad happens. The insurance company would handle the bigger money issues.

That’s how business works!

Hold the money als long as you can and profit from the interest.

I used to work for an advertising agency that made $40,000 a year by holding their vendor payments 90 days before paying them.

brownhousemedia said
I used to work for an advertising agency that made $40,000 a year by holding their vendor payments 90 days before paying them.

Wow. Thats a lot of money and it is earned quite easily.

maxvarlson said
That’s how business works! Hold the money als long as you can and profit from the interest.

“It doesn’t matter if you pay your bills late, so long as you always pay them”

quickandeasy said

maxvarlson said
That’s how business works! Hold the money als long as you can and profit from the interest.

“It doesn’t matter if you pay your bills late, so long as you always pay them”

I’m pretty sure a Credit Rating Agency will feel otherwise

quickandeasy said

maxvarlson said
That’s how business works! Hold the money als long as you can and profit from the interest.

“It doesn’t matter if you pay your bills late, so long as you always pay them”

Yeah, look at the government for instance. They’re still being given money even though they never pay any back.

If you look at the amount of uses and/or authors they have you’ll realize that it takes a lot of effort to do just one payment run, hence why they only do it once a month… It’s more manageable and makes it less likely for something to go wrong…

They are purely keeping order where there is chaos.