To Swipe or Not To Swipe…That is the ?
How you collect revenue for your firm is an important decision. There are several venues available to you: paper checks, automatic EFTs ( Electronic Funds Transfers), Cash ( Not recommended), and Credit Card Payments. This last method can be the quickest, the safest, and the most secure method to accept client payments.
In today’s digital age, it is no secret that the old traditional method of taking a credit card in person, placing it in a hand machine to imprint on carbon is long since past. Now, you can swipe a card or input a number on your iPhone with the appropriate link and device. Companies like Square revolutionized how we transact with credit cards.
So, why accept credit cards given there is a fee involved for their usage? You may sometimes need to pay up to 4% per transaction in a card not present environment. But consider the benefits - cashless (reduces any opportunity for embezzlement, robbery, or just plain human error), immediate credit approval in lieu of potentially costly returned checks which always involve bank fees, and access and availability to the client money normally within 24-48 hours of settlement. How can you NOT accept card when its use is just about mandatory in certain industries? Not doing so could be a huge competitive disadvantage in most retail environments.
Historically, this payment method has not been widely adopted in professional service arenas. This trend is also reversing itself. Most attorneys, accountants, doctor’s offices and other professional services industries now accept payment via credit cards. As a heavy user of credit cards, an individual or business cash back or travel rewards card can really add up to make a substantial impact on your bottom line. Many of your clients may prefer to pay by credit card as a result.
Your choices are quite varied for this service. Always compare at least three (3) providers and ask for the most competitive rate and let them know you are shopping for the best value. More transactions and higher average purchase tickets will give you more buying power so be sure to have those available to share with the credit card processing vendors. Your bank, Square, and third party providers like WorldPay, First Data, and MerchantOne are just some of the most popular vendors out there. A google search will yield many lists ranking the top processors so that is a great place to start.
Be sure to take the time to understand what you need - online versus POS Terminals or a cell phone link. Know that Visa and MasterCard increase rates every Spring and that is a direct pass through to you. Your bank or merchant provider cannot ever change that direct pass through fee. So, negotiate on the amount above and beyond your Visa/MasterCard Fee.
Ask your bank or merchant provider about enhanced fraud protection such as tokenization and AVS. Card present transactions are always cheaper than card not present due to the risk of fraud. Educate yourself with your Merchant Representative on all the available tools to collect and protect.
Bringing in revenue with credit cards may not be the solution for all businesses but it is a viable alternative collection method for many. The options and providers are great so do your homework. Ask your banker for recommendations or inquire from a fellow business owner who they use and why. Check with any trade organizations or chambers of commerce you belong to. Often they have negotiated low rate programs for their members.
Remember there is value in everything you do. Weigh the risk versus reward of adding e-commerce to your client’s revenue collection options. As more and more individuals and businesses seek to move away from the use of cash and paper checks, credit card processing can provide a more sustainable method of revenue collection in the long run.
