The delay is way too long. No other merchant service has this kind of wait, it's almost prohibitive for higher priced or custom orders. I use intuit go pay at Brooklyn flea and it takes 1-2 days max before the money is in my account.
As for the policy issue: According to the terms of use you are obligated to ship the item only after the transaction is complete (after you mark the item as shipped) not after you physically ship the item. In the FAQ section it essentially tells you to wait three days to ship after marking the item as shipped. I hope this clears it up, I have cut and pasted the following from the DC terms of use:
c. The use of Direct Checkout must be solely for the sale of items listed on Etsy. Registered Seller agrees to ship sold item(s) once the Payment Transaction is complete and reflected in the Shop Payment Account. Etsy reserves the right to terminate Registered Seller’s access to Direct Checkout if Seller is determined to be using Direct Checkout for transfer of funds not related to the sale of items listed on Etsy.
4. Deposits
a. All funds resulting from a completed Payment Transaction will be reflected as a balance in Registered Seller’s Shop Payment Account. Payment Transactions are considered complete once the payment is approved and Registered Seller has marked the sold item as “shipped” using the tools made available in Registered Seller’s account by Etsy. Any refunds, adjustments, or other amounts paid to Buyers in connection with purchases, or for funds received since the last Payment Day, as defined in Section 4b, are also applied to Registered Seller’s Shop Payment Account balance. Funds in a Shop Payment Account balance are eligible for deposit (“Available Balance”) into Registered Seller’s Bank Checking Account at the end of any applicable deposit delay, reserve, or hold period as defined in Section 4d.
When do funds become available for direct checkout payments?
Once a sale is made through direct checkout, you’ll be notified via email. Your order will be listed under Your Account > Sold Orders, as well as in the Pending Transactions section of your Shop Payment Account.
The amount from your sale, minus payment processing fees, is available for deposit to your bank account once the order is marked as "shipped" and any applicable deposit delay passes since the sale. The majority of shops have a standard deposit delay of three days.
For example: If you ship the item three days after the order is made, the payment is immediately available for deposit. Conversely, if the item is shipped earlier than three days, the payment will not be available for deposit until after three days since the order passes.
