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Electronic Payments

 
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Old 06-05-2015, 09:29 AM   #1
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Electronic Payments


Anyone else have customers insisting on paying with anything besides a check? People don't like to write checks anymore, it's been giving me a headache. I tried a phone app called Square, it works but I had to pay a $120 fee to take the payment. There's another app called Venmo that people have asked me to use. Sometimes they'll ask for my checking account and routing number so they can deposit directly. Then there's Paypal, banks have their own electronic payment methods as well. Anyone have a way to end the circus?
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Old 06-05-2015, 12:04 PM   #2
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Re: Electronic Payments


Cash works for me. If you are in business, the costs associated with electronic funds transfers are part of your overhead. Work them into your CODB and roll on.

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Old 06-05-2015, 11:57 PM   #3
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Re: Electronic Payments


Paypal but only if I must. I tell people to suck it up and write a check. Had one guy living in Dubai so I took paypal from him, but I rather keep my 3%.
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Old 06-06-2015, 06:47 AM   #4
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Re: Electronic Payments


I get about 30% of my money electronically. For payments under 2k it's my favorite method (most people's accounts won't do 9ver 2k electronicly). Most people are using interac e-payments which cost them like a buck and cost me nothing. I get all my money, no worry about bounced checks and no bank hold. I have square if I need to take CC but so far only one customer paid me that way and the fee wasn't too bad.
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Old 06-06-2015, 07:46 AM   #5
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Re: Electronic Payments


it looks as if Interac is a Canadian system and doesn't work in the states.

I'm using Square and charge the % for those choosing to use a CC. If volume were to continue to increase, I would add it to the overhead.
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Old 06-06-2015, 08:26 AM   #6
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Re: Electronic Payments


Just tack the fee onto the payment, list it out. Maybe next time they won't be so bashful about using a check.
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Old 06-06-2015, 10:42 AM   #7
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Re: Electronic Payments


I HATE HATE HATE taking electronic or CC payments. Did I mention I hate it?
Of all the rackets being run out there, excepting insurance, this is the worst.

Unfortunately, it is a necessary evil. They are almost all on equal footing with having exorbitant fees. I tried Square. It worked about 1/2 the time. I switched to PayPal. It works most of the time.

What I've done to discourage e-payments / credit payment is offer a small discount for cash or check, which is actually my "normal" price. Pay by CC, pay higher price. Most CC companies do not (or did not) let you charge more for CC customers, so cash discount is (was) the way around it.

The only good thing about PayPal is I have their debit card, so I get 1% cash back (woohoo ). But, that puts them at 1.7% instead of the 2.7% baseline everybody seems to be using.

You'd be surprised how many people continue to send me PayPal payments for the cash amount, even though I am very specific on the invoice about payment terms.
If I have a customer where it looks like I'll never get paid vs. taking a card, I'll take my lumps and take the card. Something is better than nothing.
I had an out of state landlord that kept "losing" my invoice. Three times she told me she was mailing a check. Three times, no check arrived. I finally pestered her enough to get a payment. She used the "e-check" option. They really stick it to you on this one. Plus, it takes forever to process.
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Old 06-06-2015, 02:11 PM   #8
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Re: Electronic Payments


I accept all forms of payment. If the customer wants to pay electronically they have a few options: I can send them a Link to their e-mail with my invoice or swipe it with my phone or laptop.

I add 3% if they want to use the service.

I use quickbooks because I use quickbooks for everything.

I have a newer business and it started out being all electronic, so I find it very easy.
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Old 06-06-2015, 02:23 PM   #9
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Re: Electronic Payments


I've posted on this quite a few times, and I'm sure KAP will be here to post the opposite viewpoint soon. I do take Paypal and I think it's quite helpful. I have sold a fairly substantial dollar amount of projects and change orders that I would not have if I did not accept credit cards. This was relayed to me directly by the customers.

I don't view the processing fee as a fee to ME, it is a fee to my customers as I clearly post a price for CC's on my proposal and the discounted price for cash or check. That discounted price is figured to my target markup. 2.5% off my gross for $100k in sales would be a chunk of my profit so I choose not to absorb it or blend a smaller percent into all my sales and then waive the fee. I could do that fairly easily as I figured last year I would need to raise my prices by .5% to cover the fee.

To address Nunya's problem, I don't invoice a customer using Paypal unless they have agreed to the CC fee. I create all invoices in QB and just duplicate the necessary invoices in Paypal.

I probably only run $20-30k on CC's per year but it REALLY seems to matter to those customers. I can understand. If they want to finance a large project out for a year vs. all at once that's their choice. I'm not a financial adviser.
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Old 06-10-2015, 09:26 AM   #10
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Re: Electronic Payments


Thanks for the replies. Clearly this is something that needs to be spelled out in my contract. I tried Venmo on my phone, it was only a $50 charge, I hope there's no fee.
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Old 06-10-2015, 09:45 AM   #11
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Re: Electronic Payments


I use Square. Maybe 1 in 4 pay me by CC. I dont mind too much.
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Old 06-10-2015, 10:58 AM   #12
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Re: Electronic Payments


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I use Square. Maybe 1 in 4 pay me by CC. I dont mind too much.

Really? $120.00 fee from Square kind of bothered me. It takes me ten minutes to drive to the bank with a check.
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Old 06-10-2015, 11:04 AM   #13
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Re: Electronic Payments


Some folks want to pay with plastic. Sometimes it's due to necessity (they don't have the funds to pay for the repair right now so they use the credit card), but most of my customers use plastic to earn whatever points the issuer is pushing.

Maybe it's for an upgrade to first class, or a reduced rate for motel or car rental.

But whatever the reason, if yer gonna be in business (properly all and such), you'd better be prepared to take plastic.
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Old 06-10-2015, 05:42 PM   #14
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Re: Electronic Payments


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Really? $120.00 fee from Square kind of bothered me. It takes me ten minutes to drive to the bank with a check.
Would it have bothered you if you had charged them an extra $120 to take it?
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Old 06-10-2015, 06:41 PM   #15
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Re: Electronic Payments


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Would it have bothered you if you had charged them an extra $120 to take it?

That's what I'm going to start doing. I didn't think it would be that high so I didn't pay much attention to it before. Square gives you airline miles is why people like to use it.
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Old 06-10-2015, 08:47 PM   #16
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Re: Electronic Payments


I make it as easy as possible for the customer to pay me and that means having all form of payment options available. They're all the same to me, no discounts for cash or check or mark up for credit card. CC fees are a cost of doing business.


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Old 06-10-2015, 09:07 PM   #17
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Re: Electronic Payments


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i make it as easy as possible for the customer to pay me and that means having all form of payment options available. They're all the same to me, no discounts for cash or check or mark up for credit card. Cc fees are a cost of doing business that are passed along to the client.


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Old 06-10-2015, 09:43 PM   #18
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Re: Electronic Payments


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fify

No fixing needed. I meant what I said. I won't charge the customer for paying me a certain way. Just like I won't give a discount for paying cash. Price of my work is the price of my work, pay me what ever way you like.

I can't, in good conscience, tell the customer how much a repair cost, do the work, then go to collect payment and say "oh, you're paying with a credit card? Then it will actually be more." Makes me look shady.



I'm sure I'll re-evaluate those statements when CC's become a major part of my business.


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Old 06-10-2015, 09:47 PM   #19
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Re: Electronic Payments


I use gopayment... A $5000 swipe costs me $80 or so. The money is also transferred to my account within two days.
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Old 06-11-2015, 10:07 AM   #20
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Re: Electronic Payments


Venmo locked me out of my bank account. Now I'll have to drive to the bank and probably spend about an hour trying to get it unlocked over a $50 charge. I'm really starting to hate these electronic payments, what the hell is wrong with writing a check?

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