How accepting online credit card payments powers sales, keeps customers happy
Two barriers often stand in the way of contractors offering their customers the option to pay invoices online with their credit cards. The first is that owners are extremely busy. It can take some time to set up the infrastructure for online credit card payments, and they just never get around to it. Second is the expense (usually around 3% per transaction) associated with accepting credit card payments makes the idea unattractive.
However, now it’s easier (and quicker) than ever to start accepting online payments, and here are four reasons why the trade-off for a small piece of revenues may be well worth it.
CUSTOMERS WANT IT
According to credit card processor Total System Services’ 2016 U.S. Consumer Payment Study, 75% of consumers prefer to pay with credit and debit cards. Consumers make online payments for everything from medical bills to pizza delivery, so why not painting and contracting services? Online payments are easier than writing and mailing a check and, typically, people have at least one of their credit cards readily available at the time a job is completed. And they’re usually ready to use it!
FASTER, MORE RELIABLE, PAY
Making it easier for customers to pay also means your payment arrives quickly and reliably, much more so than with checks, which require action on your part (a trip to the bank or online deposit) and can take up to a week to clear. Credit card payments can make it to your account within a day or two. Getting paid faster and more reliably reduces your cash flow risk, plus you don’t need to waste time following up on unpaid invoices.
Tip: For those invoices that do require follow-up, send an email reminder that includes a link to your online payment system!
LESS EFFORT, FEWER ERRORS
It takes a considerable amount of time and effort to keep track of your paper payments. When you receive a check, you must make a copy of it and file it away, then go into the customer’s record and note the payment date and amount. You need to determine if there is any remaining balance and calculate the amount. All these manual steps increase the likelihood for errors. When you accept online payments, you always have an electronic record. With the right system, payments are automatically attributed to specific invoices and customer records to simplify and automate record-keeping.
In 2012, Intuit conducted a survey involving businesses who implemented online payment. The company found 52% of those small businesses saw revenue increase by $1,000 per month. Another 18% saw increases of $20,000 per month! Online credit card payment demand will certainly grow for the foreseeable future as E-commerce sales continue to climb, too. They are expected to top $684 billion in the U.S. by 2020, according to statistics tracking company Statista. The firm also noted in a 2016 report that 64% of those who have never made a mobile payment see themselves doing so in the future.
Accepting credit cards online removes a barrier to the customer who does not have enough cash on hand but has the available credit to do business with you.
With happier customers, time and money saved, and increased sales, those fees don’t seem so high after all.
Jonathan Weinberg is the founder and CEO of Builder Prime, Inc., a cloud-based software solution company specifically created to help contractors save time, earn more money, and win more jobs.