About 4 or 5 years back I stopped taking cheques or cash just credit cards, debit, etransfers or I will direct debit the clients bank account. I do it for corporate or personal clients. I find it does save me money and time. I’ve been using practice ignition for the majority of my billing’s and most engagement letters and find it fast and easy
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I switched to accepting Credit Cards about 5 years ago. Initially I was discounting the fee if they paid by Internet Money Transfer, Cash or Cheque. (This method circumvented the payment processor agreements which disallowed the additional charge for paying by credit card.)
3 years ago, I started offering monthly pre-payment options. This was a recurring monthly invoice, auto-charged to the client’s credit card. My invoicing system, linked to Stripe, facilitated this. It changed the business as I no longer had to deal with collecting outstanding bills. So that you understand, my invoicing system is disconnected from my bookkeeping system, by design. Though I am thinking that it is time to consider consolidating the two.
Frankly, if I could figure out a way to handle PAD to the client’s bank account, I would do so.
Also, I will point out that my system is entirely on the internet. I caution clients that I do not have access to their credit card information; It is entirely handled by a third party (Stripe) to prevent any question of fraud.
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I was using Square at the time. Nothing in their agreement prohibited it. In fact setting it up was super easy.
Now, I am with Chase, not much flexibility there!
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If the convenience of collecting your money immediately is not worth 3.4% (and that’s only if you are manually entering card info - tap, etc is 2.65%), then maybe you need to re-think accepting credit cards.
Think about it this way:
Emailed receipt to your client right at the time of payment
The money is in your account, guaranteed, the next business day.
No chance of a cheque bouncing and all the related costs to getting paid again
No running to the bank with cash (if you’re still accepting it - I’m not in a COVID world) or cheques
No time spent taking pictures of cheques to do mobile deposits
Those reasons and saved costs are more than worth it to me and my clients appreciate the opportunity to ear Airmiles or Avion points or whatever their card offers them.
The Merchant Providers originally said you couldn’t charge a fee because it was a service to you that ensures you get paid quickly. The service is to YOU not your client. When you pass that cost down to a client, you appear a cheap skate and people tend to leave. Think about your use of your credit cards. Has anyone ever charged you a fee to use it?
Only one ever did it to me and I have never gone back.
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I agree - charging a fee for CC is probably a violation of the CC agreement. Face it, it’s just a cost of doing business. Restaurants don’t charge for CC payment and I would expect they are working on smaller margins than you. I would think showing the extra charge would annoy clients, it would me.
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Bitcoin to bitcoin has no convenience fee and it will be directly posted to your account.
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“Bitcoin to bitcoin has no convenience fee and it will be directly posted to your account.”
And then you are recording that daily value manually and reconciling it each day manually in your sub-ledger account for your bitcoin asset? And adjusting to other gain/loss accounts? That all sounds a bit complicated and time-consuming.
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@getsmartfinancialsol Thank you for your comment.
May you please expand on the application of this transaction?
Also, as a due diligence measure, may I ask does this transaction operate in a legal manner while remaining tax compliant?
I bumped everyone’s fees about 2% the year I started accepting credit cards. It averages out to cover all the fees.
I use square for in office transactions because it is fast - next day deposit - and Stripe for online payments (through DocuSign) because it was the easiest to set up to work.
I send the invoice with the documents for signing (T183 etc) through DocuSign and 98% of clients choose to use the credit card payment option. During the pandemic it convenient for the client and therefore worth the money.
When we are back to in office meetings I’m hoping to go back to other payment methods but I’m still breaking even on the fees, so that’s good enough for me.
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Jglass,
Curious about the costs between docusign and the credit card fees’?
Mark
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I’m on the “Business Pro” plan with DocuSign ($636/yr), I started with a standard business plan that I had anyway, but needed the upgrade to pro for the payments so that part of it was $240 for the year, but it also added other features.
The payment processor has their own fees, either per transaction, or a percentage fee. And you can only use one of their approved “payment gateways”. I found Stripe to be the simplest to set up because I don’t have a website. If you do then others may be just as easy for you.
All in all it has been great, and I have no regrets. I’ll probably switch everything to TaxFolders when TaxCycle figures out a payment system within it like DocuSign has, otherwise I’m staying with DocuSign. I have the invoices set so that clients can override the payment amount if they wish to pay me through a different method (EFT or cheque), but about 98% of them pay by credit card now. And the client feedback on the ease of use has been very good.
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Thank you!
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@jglass I have really enjoyed your replies over the years.
You’re clear, concise, and helpful. Thank you for your comments.
Also, thank you to everyone else who took the time to reply.
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my 800 year old widows don’t have Bitcoin. This seems like it would be a VERY limited application in addition to the comments from joe.justjoe1 . I bit the bullet years ago and have a wire debit machine like any big merchant and 98 percent of people pay at the desk when signing. cheap debit and 1.8% on visa/MC. just another cost of sales so to speak. the time it saves is immense and people expect it now. costs about $1000/year in total to run.
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