Today’s consumers are increasingly credit-card centric. They expect to be able to pay by card versus keeping cash on hand or writing an old-fashioned check. According to the Federal Reserve, more than 80 percent of Americans had at least one credit card in 2020.
And, paying with a credit card increased in popularity: from 24% of transactions in 2019 to 27% in 2020 according to the latest available stats from the Federal Reserve Bank of Atlanta.
Those consumer expectations are extending into payments for professional services. Lawyers, accountants, and graphic designers can easily take advantage of the flexibility and convenience of processing credit card payments through products like Clover’s Virtual Terminal, which gives businesses the opportunity to do business anytime, anywhere.
Historically, professional service firms have been hesitant to accept credit card payments – but that’s changing fast. Here are 5 benefits of taking credit cards for professional services firms.
Printing physical invoices, mailing them out and then waiting for clients to pay can put a strain on the operations of a professional service firm. In the legal industry, for example, the American Bar Association has recognized credit card payment for fees since 1974, but law firm credit card processing lags behind, with just 60 percent of large and midsize firms offering electronic payment as an option.
Businesses that accept credit card payments are paid faster by clients versus ones who don’t. In the legal industry, that number is 40 percent faster. The Clover Virtual Terminal allows professional service firms to request client payments by email and allow them to pay by credit or debit card online, helping to reduce long waiting periods and freeing money for the business to use on other expenses.
Many professional services worry about the possibility of their customers’ credit card information becoming compromised in a security breach. But online payment processors and merchants must follow and maintain compliance with the Payment Card Industry data security standards (PCI DSS). These security standards are designed to help ensure that companies who accept, store, process and transmit card information do so more securely.
Because customers trust businesses with their payment data, the Virtual Terminal is an ideal solution because it helps shield sensitive payment information from fraud and abuse. Fraud monitoring tools like address verification service (AVS) and card verification values (CVV) are additional steps to help ensure the safety of this critical data.
Processing fees are often a valid concern for professional service firms who have not moved to credit card payments. For smaller firms, potentially dealing with extra fees can be a major issue. Some practice workarounds like deducting credit card fees when filing tax returns, or adding an additional “processing charge” to the bill, which many restaurants have also begun implementing.
With the Virtual Terminal, there is no monthly fee to use this convenient service; however, each transaction will be charged a processing fee at the rate agreed upon between your firm and Clover. What’s more, Clover offers surcharging in most states so you can itemize credit card processing fees for the client to pay. If you opt into this program, a 3.5% surcharge will be levied on all credit card transactions. Learn more.
No longer do firms who want to move into the credit/debit card realm need to purchase expensive equipment to process cards. With a no-hardware plan you can request and take credit card payments and manage your business through a web browser or your mobile device. Our professional services page details how firms can get started on Clover.
Another way firms can take advantage of the flexibility of electronic payments is to offer recurring payments for regular amounts. With the client’s card information securely stored, monthly payments give both the business and clients the peace of mind knowing that payments will be received automatically on time each month.
Professional service firms that don’t provide credit card payments are doing their business a disservice by limiting their customer base. Bankrate reports that Gen Z consumers are opening new credit card accounts at a faster rate than older cardholders – most likely because they’re reaching adulthood and earning incomes to support credit cards. Expect the younger generation of potential clients to search for service providers who do accept credit cards, looking for flexibility in their payment options.
With the advances in electronic payment methods, it’s easy to make the switch and open doors to a wider range of clients by giving them the option to pay as they choose, while also setting up your business to succeed through better invoicing and simplified bookkeeping.CONTACT SALES
This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.