For contractors, cash is often king. But just because you prefer cash payments doesn’t mean you shouldn’t also offer a credit card payment alternative.
Sure, having a credit card processor take a percentage off the top of each bill feels like it cuts into profits, but the convenience to your business and customers can make up the difference. And the additional sales you could make as a result should far surpass the difference of a few percentage points.
So don’t be penny-wise and pound-foolish. Cash may be king, but credit cards deserve a place in your royal court. Here’s why.
1. It Can Raise Overall Sales
The number one reason you should care about offering credit card payments is the promise of increased sales.
Up to 83 percent of small businesses that began offering credit card payments saw a sales boost over the course of a year, with 52 percent doing an additional $1,000 in sales monthly, and 18 percent making $2,000 more per month, according to an Intuit Small Business Survey.
In other words, the odds are pretty good that the simple act of expanding your payment options into credit cards will help, not hurt, your bottom line.
2. Credit Cards Help Improve Cash Flow
Even when a customer pays up front with a check, you don’t receive that money right away. It has to be cashed, the bank issues a hold, and eventually the money is released. (That is if it’s not a bad check!).
Credit card payments have the benefit of being virtually instantaneous. Top card processors today offer deposits in 24 hours or less. When you’re juggling staff, budgets, contracts, and supplies, the added layer of cash flow stability can be a huge relief.
And of course, making sure everyone gets paid on time – least of all you – is just good for business.
3. Credit Payment Integration Makes Your Business More Efficient
Many process adjustments can make a business more efficient, but at its core, efficiency is about reducing time and process steps.
Credit card payments that integrate into your workflow and business management software – along with all your other payment types – can reduce costs in the field as well as in back office bookkeeping and accounting. The additional data can also help you understand your customers’ preferences and track which payment methods they most prefer (as well as how different sales and promotions might be performing).
A piece of advice: Try to find business management software like FieldPulse’s comprehensive contractor software that integrates mobile payments.
This can reduce errors by having your team process payments in the field, on the fly, stored in one, central location.
4. Credit Payments Can Help You Close Deals
Remember that consumers often use their credit cards as a form of self-financing.
57 percent of Americans have less than $1,000 in savings in their bank accounts, according to a 2017 survey from GOBankingRates.
If you need a new roof, or a pipe bursts, or you’ve got termite damage – or any of a million other things that can wrong with your house – you’re going to get it repaired immediately.
In cases like this, offering credit card payments might be one of the only ways to close the deal. The customer might have to walk away entirely if they’re required to pay with cash. That’s a total loss of potential revenue.
After all, most contractors can’t and don’t offer financing for their customers. But they can offer credit card payments.
And with all of the credit card rewards being offered today, some customers will choose a contractor that accepts card payments over one who doesn’t. This can give you a competitive edge.
5. Credit Payments Can Help Your Upsells
It’s always a good day when you win an on site upsell. Your $2,000 job just turned into a $3,500 one!
But onsite upsells are tough. Most customers have an amount they expect to pay based on the estimate and don’t like to feel like they’re being nudged out of the agreed upon price. Cost equals pain.
But if that’s the case, you are going to want to accept payment in plastic. Why? It’s the least painful way of parting with one’s money. Study after study shows that people are willing to spend more when they use a credit card – sometimes up to 100 percent more, according to this study from a professor at MIT Sloan School of Management.
Simply put, when presented with an ok versus great option, there’s a better chance that your customer will choose the higher cost option if you’ll take a credit card payment. They want something great, and this helps them purchase it.
6. Customers Expect It
Nearly six in 10 customers regularly ask small businesses if they take credit cards, according to a 2013 survey by WePay. No doubt that number is even higher in 2018.
The inescapable truth is that this is becoming an increasingly cashless society. Rather than credit card payments being a “perk” offered to high-end consumers, customers often rarely have anything but credit on hand.
While after hiring a contractor, a customer will often consent to write a check or even draw cash if necessary. A better tactic for repeat sales and higher customer satisfaction is to offer the customer’s preferred payment method.
Picking the Right Provider
Assuming you’re sold on the sheer practicality of accepting credit card payments for your contractor business, your next questions is probably which provider to use. Square? PayPal? Stripe?
Ultimately, there isn’t much difference between these providers. They all offer both card swipe dongles and EMV chip readers and a small percentage transaction fee.
If you’re already a FieldPulse customer – or thinking about becoming one – we recommend FieldPulse Payments. It works just like any of the above services with the additional bonuses of complete FieldPulse integration. That means connecting your customer information with the job invoice, collecting payment, then bringing that back into QuickBooks Online (if you’re using it).
Plus, it can be a lot less expensive. That’s because unlike the competitors, FieldPulse Payments offers a flat 2.9 percent fee for all transactions, regardless of whether it’s keyed in or swiped. That’s to make it easier on you and your employees. And it means not having to carry a swiper/dongle all the time.