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Looking to potentially taking credit cards for payment - are there any concerns I should be aware of?

We are looking at potentially being able to accept credit cards for payment of invoices.  We are a services organization.  Are there any concerns I should take into consideration?  It seems like there are some rules we have to follow for safeguarding credit card information but I have not spent much time researching this issue yet.  Does anyone accept credit card payments for service work and is it worth the cost?  We have had only a handful of collections issues over the 25 year history of the company.  Any guidance would be appreciated.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

The safeguarding customer information should not be a huge concern, if you do not take posession of the credit card information (but check with your attorney) and process credit card payments through a third party like PayPal or a bank. You never receive the confidential information. You will only be responsible to ensure your third party is reputable. In addition to the costs related to accepting credit cards, please consider the costs and process you will need to develop to issue customer refunds. If not priced correctly, every refund will be a loss to you.

Patricia Hickey
Title: Chief Financial Officer
Company: CCS
(Chief Financial Officer, CCS) |

We started to accept credit card payments for our small survey business to help get payments in the door. We use a third party to help, but we also had to make sure we were in compliance with safeguarding any information faxed or emailed to us, so you want to look into that.
What caught us by surprise was when some companies with large professional services invoices due to us wanted to pay by CC as well. The fees were a big expense to us. Think through what this will cost you versus whether it will help get cash in the door faster.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

My neighbor runs a small Gutter/Construction company. He started accepting CC's because he had customers willing to pay him on the spot when the work was complete; but didn't want to write him a check. He was looking at it from the perspective of why would I turn immediate payment away? He looked into an App for his phone and it's really quite brilliant. The vendor sends this little device that has a swipe built in; you plug it into your phone; swipe the card and he can even send the receipt directly to an email address (limiting the need to print a receipt). He says the fees are not crazy because he doesn't use it all the time and they are fairly reasonable with the percentage they collect. I recently went into a local seafood shop and they collected my payment the same way! Consider a cash flow perspective as well. The faster you can turn the work into cash is better (obviously as long as the vendor you use isn't charging ridiculous fees). Shop around; get different quotes - even check with your bank. Credit Card vendors are willing to be flexible. I shop our vendor every time my contract runs out. It keeps them honest. Good luck!

Cindy Kraft
Title: CFO Coach
Company: Executive Essentials
(CFO Coach, Executive Essentials) |

Credit card fees are, in my opinion, a cost of doing business. Most people prefer to pay with credit cards and most of my clients use AmEx, the most expensive of the major cards.

I've been with Avalon through Costco and their service is great and their fees are reasonable (relatively speaking). I use their virtual merchant service so everything is web-based, they hold all the customer information, and I can collect payment on the road through my iPhone. This set-up works very well for me.

If you're referring to "Square" Christie ... that was a complete waste of my time and effort. They are really only set up to do processing under $100. Anything over that, and my swipes were rejected.

(Agent, JKS Solutions, Inc.) |

There are very low fee options out there. Yes you should be accepting credit cards and the cost of any fees will be paid back by the reduced efforts to collect. If you have a banking relationship, contact your bank about merchant services, if you are using QuickBooks, there are some very very low cost options that Intuit offers.

Ram Hariharan
Title: Technology Director
Company: Expedia, Inc.
(Technology Director, Expedia, Inc.) |

There are lots of new entrants to the payment industry these days. Depending on the context for your business, it might also make sense to look into PayPal and Amazon Payments.

Topic Expert
Anand Goel
Title: CEO
Company: Optimized Payments Consulting
(CEO, Optimized Payments Consulting) |

Depending on the nature of your, you should look at a Virtual Terminal, or a web-based solution through one of the big payment processors like First Data, Chase Paymentech, Elavon or someone like PayPal. PayPal will be most cost effective if you are doing less than a $1 million in credit card sales per year. Moreover, you can setup customer profiles along with their credit card number with PayPal, and then come back to that profile online to charge recurring payments. If you collect payment from your customers on a regular basis (e.g. monthly, quarterly, or annual) basis, you could setup a recurring transaction with PayPal and most Virtual Terminal solutions.

Assuming you are a small business (since you are just starting to accept cards) then your effective cost of card payments should be around 3.0% of total card sales.

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