Friday Five Practice Tools
Five Ways to Receive Credit Card Payments
Every law firm has a trust account and an operating bank account and allows clients to pay with a check or cash. But in this day, many clients also want to know, “Do you accept credit cards?” There are many options to consider when deciding if you’ll accept credit cards.
Recently I asked two groups on LinkedIn—one for small and solo law firms and one for small business owners—which service they use to accept electronic payments. The following were the top five responses.
First, though, this caveat: Before you begin using one of these services, consult your state’s ethics rules regarding electronic payments. There may be restrictions regarding which bank account you can use to accept payments using one of these services.
1. QuickBooks. If you already use QuickBooks to manage your accounts, you might consider activating QuickBooks’ Merchant Services for receiving credit cards. The basic credit card processing service has a $19.95 monthly fee plus a fee for each transaction: 1.64 percent plus 27¢ for a swiped card; 2.47 percent plus 27¢ for a keyed card. You’ll also have to pay an annual PCI-compliance fee based on your transaction volume.
The benefit of this service is it’s integrated into the QuickBooks you’re already using. Its transaction fee is lower than other services, too—but you have to balance that against the monthly fee, which could make the total cost higher than other services.
And if you want to have a card-swiper that attaches to your mobile device, QuickBooks has that, too, as part of its GoPayment service. That comes with a separate $12.95 monthly fee, plus a fee for each transaction. Check your QuickBooks support for additional options for accepting payments.
2. PayPal. PayPal is well-known and so commonly used to process payments that many clients ask, “Do you do PayPal?” It’s easy to set up a PayPal account with your email address and a bank account number. PayPal can be used to accept payments via credit cards, checks or customers’ PayPal accounts, and you can also use it to send invoices to clients. There’s no fee to set up your PayPal account and no monthly fees. You only pay a fee for each transaction. A payment up to $3,000 is 2.9 percent plus 30¢. A payment between $3,001 and $10,000 is 2.5 percent plus 30¢.
PayPal also offers a card-swiper that you can use with your iPhone, iPad or Android device. The fee to swipe a card is 2.7 percent.
3. Square. Square is a card-swiper that you can plug in and use with your iPhone, iPad or Android device. I’m seeing Square being used more and more in business. For example, I live in Phoenix where there are dozens of amazing food trucks, and I haven’t been to a truck that doesn’t use Square. Retail shops are also using Square attached to an iPad instead of having a traditional credit card processing machine. There’s no monthly fee to use Square, only a 2.75 percent per-swipe fee. They also have the option to use it for a $275/month fee and no additional charge per transaction.
The downside of using Square is you must physically swipe the person’s card. That means you can’t send clients an invoice and invite them to use Square’s website to pay it.
4. LawPay. LawPay is a payment processing service designed for lawyers. Unlike Square and PayPal, where you can only attach one bank account to your account, you can process transactions into your trust account or your operating account. It’s also set up to take all the fees for the service from your operating account, so you’ll never have to worry about inadvertently paying your processing fees with clients’ money. It costs $30 per month to use the service, and that includes online payments and the ability to separate earned and unearned portions of a single fee. There’s also a 20¢ to 25¢ fee per transaction.
5. Your bank. You can also contact the bank where you maintain your firm’s trust account and operating account and inquire about your options to receive electronic payments. Your bank may give you the ability to process payments without any additional fees. This is different from wire transfers that have fees for the sender and the recipient.
Especially if you are considering creating a virtual law office for your firm, you’ll want to explore whether your desired service comes with the ability to process credit cards and other electronic payments.
Ruth Carter is a lawyer, writer and speaker. Her virtual practice, The Carter Law Firm, focuses on intellectual property, social media, First Amendment and flash mob law. In her Attorney at Work column “Nothing But the Ruth,” she writes about the lessons she’s learning while building her new virtual practice.