By Lisa Joy Tuttle, MA, BCC, Guest Contributor
I love coaching so much that if money were no object, I’d do it for free! But alas, is it not and so I can’t. It doesn’t really matter to me how I get paid, just so long as I get paid. For a long time I was happy keeping it simple and just took checks—no fees, no mystery, no new skills or complex vocabulary to acquire. There was just that itty bitty problem of clients with ADHD not remembering to bring along their checkbooks to our meetings, or clients remembering to mail me their check on time…or at all.
One day I was bemoaning my “not getting paid” conundrum to my sister Debra, an acupuncturist with a thriving solo practice in Berkeley, California, and she read me the riot act: “It’s time to treat your business like a business, Lisa! Your clients depend on you to be professional and have payment options—so just bite the bullet!” I knew this step in my business development was inevitable but the task seemed daunting. How does one decide from the gazillion options available?
The timing couldn’t have been better when a conversation thread popped up in late September on the ACO Coaches Listserv: “What credit card processing company do people use?” was the query from ACO member Dale Davison, eager to take payments from her clients over the phone. A robust conversation ensued, and this article summarizes the recommendations from the field—the companies we’ve tried, the factors we’ve used to weigh the features, and pitfalls along the way.
I had already begun a bit of research of my own, spurred by a new client telling me she would much prefer to pay me by credit card. I first compared companies who offer the little card reader doohickey that plugs into a smart phone, the most well-known being Square. I discovered that in addition to its online platform, PayPal now has mobile payment service called PayPal Here; and Staples has launched its Staples Mobile Register. Amazon is the latest of the bunch ready to grab a bite of Square’s big market share with its new Amazon Local Register, launched this summer. Two other services not reviewed here, that you might want to consider comparing, are Loop and Pay Anywhere. With all of these services one can swipe the card with the plug-in reader for in-person payments, and enter credit card numbers manually for phone or Skype clients.
While the merchant services offered by our banks can be a convenient option, plans vary and so can the cost. Victoria Roche agreed, “I’ve been using the merchant account affiliated with my bank and the fees are way too high. It’s time to make a change.” Having reached the same conclusion, a number of ACO members are now PayPal fans. “I advise you to investigate PayPal as I am doing at this time,” wrote Carol Ginoux: “They have a fairly new cc system that looks more economical (i.e., good rates). It seems like a better system than what I presently have, which is connected to my bank.” Another member appreciated the ease and flexibility of using PayPal: “I have a page of my website set up to take Paypal payments. The payments can be either a Paypal payment or a standard credit card payment that Paypal processes. Hope this helps!”
Yes, it did. I have since begun experimenting with PayPal, and will likely continue to use that because I like the invoicing option and ease transferring money to my account. Currently, I am only offering the credit card service for clients who pay my full fee with a package of three months or more, and I have not asked clients to assume the charge, as some of my colleagues have reported doing.
Dana Rayburn lauded DirectPay (formerly Practice Pay Solutions), which uses Authorize.net for its interface: “It’s very flexible. I can enter card payments through the internet, I have many of my clients set up so their cards are charged automatically each month through Infusionsoft and it allows people to buy my books from the shopping cart on my web site.” She also reports that the support is good—sentiments that were echoed by Laurie Dupar. Additionally, DirectPay offers some cool value-added features, such as an online shopping cart, affiliate programs, virtual assistants, and free business development webinars with seasoned entrepreneurs.
Square won high praise from Kerch McConlogue for its ease and flexibility. Kerch writes, “I LOVE SQUARE. If you’re just taking payments on the phone… no billing, tracking, etc. You CAN swipe a credit card… or you can enter the numbers by hand. Might be a slightly higher percentage than a bigger service, HOWEVER, you only pay when you use it. Money goes into your account pretty quickly as I recall.” Abigail Wurf seconded the emotion: “I am with Kerch, the Square is super easy and it is also easy to make different types of report regarding transactions. If I can to do it, anyone can.”
Nancy Ratey suggested we explore having our clients set up direct deposit from their account to ours: “I think Intuit does it. Someone had me pay them that way and it was VERY easy.” Each bank has its own protocol for this. Nancy discovered that some banks consider coaching businesses not stable enough to warrant their accepting applications to have credit card machines directly, and require that we go through a “gateway” (such as DirectPay). Another conversation on the Listserve recently, introduced FreshBooks—a cloud-based accounting software service that integrates payment processing with its bookkeeping platform. Marla Stone wrote, “While the majority of my clients pay via check in person or by mail, I use FreshBooks for those clients who prefer paying online. I use the option linked with PayPal and through banking rather than credit card. Sending out statements is easy as is keeping accounts.”
In short, because all of us work with clients challenged by ADHD, systematizing our payment procedures is a gift to them as well as to us . . . who, since it just seems to come with the territory, may also be challenged by ADHD! Setting up recurring payments with any of these companies is a relatively easy process, and both client and coach can relax, knowing the money part is handled.
Here’s how some of the options compare:
|Processing Company||Rate per Swipe (%)||Rate for Keyed Trans (%)||Other fees?||Customer Service||Cards Accepted|
|Square||2.75||3.5 + 15¢*||15¢* per trans
|Online||Visa, MC, Amex, Discover|
|Amazon Local Register||1.75**||2.75||$10 reader||Phone and email||Visa, MC, Amex, Discover|
|PayPal Here||2.7||3.5 + 15¢*||15¢* per trans $10 reader||Online||Visa, MC, Amex, Discover|
|Staples Mobile Register||2.5||3.5||$15 reader||Phone/Email/ IM||Visa, MC, Amex, Discover|
|Process $1K Monthly||3.15 + 40¢*||$75/year||Online chat||Visa, MC, Amex|
|Process $1K+ Monthly||2.30 + 40¢*||$75/year||and phone||Discover|
Notes. Several of these companies, including Staples and PayPal Here, offer rebates for the full purchase price of the card reader. Some companies charge an additional 1% per transaction for international transactions. All the companies surveyed here also offer automated recurring billing and E-check acceptance.
*Additional fee per transaction in cents (¢ or $0.01 USD).
**Introductory rate until January 1, 2016.
Here’s how to find the companies online:
|Amazon Local Register||www.localregister.amazon.com|
|Direct Pay||www.directpayinc.com / www.authorize.net|
|Staples Mobile Register||www.staplesmerchantservices.com|
How Does Credit Card Processing Work?
A Seven-Step Process
While each company has its own particular way of routing your clients’ funds to your pocket, here’s how DirectPay explains its method…
STEP 1 The customer submits his credit card for payment.
STEP 2 Authorize.Net manages the complex routing of the data on behalf of the merchant through the following steps/entities.
STEP 3 Authorize.Net passes the secure transaction information via a secure connection to the Processor. The Merchant Bank’s Processor submits the transaction to the credit card network (like Visa or MasterCard). The credit card network routes the transaction to the bank that issued the credit card to the customer.
STEP 4 The issuing bank approves or declines the transaction based on the customer’s available funds and passes the transaction results back to the credit card network. The credit card network relays the transaction results to the merchant bank’s processor. The processor relays the transaction results to Authorize.Net.
STEP 5 Authorize.Net stores the transaction results and sends them to the website for the customer and merchant to see.
STEP 6 The merchant delivers goods or services to the buyer.
STEP 7 The issuing bank sends the appropriate funds for the transaction to the credit card network, which passes the funds to the merchant’s bank. The bank then deposits the funds into the merchant’s bank account. This is called “settlement,” and typically the transaction funds are deposited into the merchant’s primary bank account within two to four business days.
A Word about Security
Card processing systems must adhere to the Payment Card Industry Data Security Standard (PCI-DSS), to protect sensitive information and ensure that credit card transactions are secure. All of the companies I’ve reviewed here are “PCI compliant” but some companies out there may not be, so do your homework!
Lisa Joy Tuttle, MA, BCC, is an executive skills coach with a Master’s degree in Applied Psychology and over 25 years experience in the human development field. She received her coach training from the Institute for Life Coach Training, MentorCoach, and JST Coaching. Lisa Joy’s signature program, Improve Executive Functions with Mindful Self-Management® at the University of Pennsylvania, integrates current understandings of habit change, mindfulness, and ADHD to increase effectiveness and life satisfaction for the adults and young people she coaches. You can contact her at 484-843-1569 and firstname.lastname@example.org.