Every once in awhile I run into a service provider who doesn’t take any payments except checks and cash. I was that way at one time too. Now I find that expanding the methods of payments that I take has opened the doors to many more clients.
Just like technology, methods of taking payments have changed dramatically in the past few years. I suspect there will come a time when checks become obsolete too and I already have career industry colleagues who don’t take checks. I prefer other forms of payment but will take checks.
Have you ever been to a garage ready to order major car repairs only to find that they don’t take credit cards? Now ideally you should have this in a savings account ready to go and not use credit but realistically many people don’t have enough fluid cash to pay a $1000+ bill. Even if you do have that amount available, using your debit card is much more convenient than paying cash or even writing a check.
What are the options and risks for taking payments?
- CASH – You can take cash but you then have to take it to the bank. There is no risk… unless your customer or client ended up with counterfeit money somehow.
- CHECKS – Checks don’t clear immediately and you can provide services before they clear or the check can bounce completely and you might not know it until the customer is long gone.
- DEBIT CARDS – Most people carry them now and you aren’t adding to their debt. Clearly the best option from a financial management angle.
- CREDIT CARDS – As I mentioned earlier, easy way to get payment, people don’t have to have fluid funds in their account and just as with debit cards, you will know immediately if the funds are available.
Is it hard to set up payment processing systems and what are the options?
There are so many options out there that I couldn’t possibly list them all here. Some of the ones that I am most familiar with include:
- QUICKBOOKS MERCHANT ACCOUNT: Signing up for this service can be done right in QuickBooks, you will have some fees depending on your bank. I pay $19.95 per month plus a $14.95 for the online billing option and then there are the fees which are based on the volume you generate. If you don’t have any charges in a month, you only pay the basic fees. The advantage is that everything runs through QuickBooks with no external systems and the potential negative is that fees could be lower elsewhere.
- PAYPAL: I’ve used PayPal for the last two years. Even if your customer doesn’t have a PayPal account they can still pay through PayPal using their debit or credit card. I have not experienced any trouble at all and the fees seem reasonable.
- BANK MERCHANT ACCOUNT: Our bank had told me they could process through QuickBooks with their merchant service provider. It turned out that wasn’t an option and when I asked to quit the service they told me there was a $500 early cancellation fee. I eventually got it waived but not before they took it out of my account. I fought hard to get it back. Make sure you read the fine print. Your bank may be totally different.
As I said there are many options out there, you can find one that works for you as a business professional but if you have decided that using PayPal or Merchant services is not for you, maybe you should think again. You are potentially losing many customers.