By Jason Unger
I love the fact that money is digital. Like, really love it. In fact, I started a personal blog and wrote an e-book all about the amazing ways that we can manage our money in a digital age.
As cash becomes less prevalent in our society, it's no a surprise that we have clients who ask if they can pay bills by credit card. And given that we have clients all across the country, it's not like anyone is knocking on our front door with a bag of cash to pay us.
We only take checks, ACH payments and, in some specific situations, PayPal. Here's why we don't accept credit cards as payment — and what you need to know if you're thinking about ditching them as well.
Credit cards are the middleman in the business relationship.
Any time that you buy something at a store with your credit card, the credit card processor is taking a piece of that transaction as payment for connecting you (the buyer) and your money to the seller (and their bank account). That payment comes from the seller's bank account, but as any capitalist knows, the seller considers that cost when pricing their goods. So in the end, the buyer pays it. This is generally well-known, and it's why, for example, some gas stations only take cash or have separate credit and cash prices.
We don't need a middleman in our relationship with our clients. Our business is small enough that we don't have hundreds of clients clamoring to pay us with credit cards; we've got dozens, and most of them are other businesses as well. They're used to paying personally by check, having an accounting team that cuts their checks, or sending an e-check.
We watch our fees closely. Credit cards increase them.
As a small business owner, I look to keep our expenses on the low end. Accepting credit cards means more fees, and less profit. We could pass the fees along to the customer across the board, but our pricing tends to hit round numbers -- so adding in $11.72 to our website management packages doesn't really make a lot of sense.
What we have decided (and let our clients know well in advance) is that if they want to pay via PayPal, then they are responsible for the PayPal fees as part of that transaction. We haven't had a client say no yet; they understand (and sign in our agreement) that if they decide to pay via PayPal, they pay the fees. Otherwise, they can cut us a check.
Should you take credit cards?
I can't speak for other businesses about whether or not taking credit cards makes sense. I can imagine that if you're working with mass numbers of consumers, you'd need to. Or, if you have the need to get paid quicker via credit card than wait 45 days for a check to be sent, you might consider it.
But for agencies and teams like ours, we don't — and we're totally fine with that. It may seem a little old school, but in the business-to-business world, it's not out of the ordinary at all. According to a study by REL Consulting in 2014, business-to-business companies incurred an average of $2.2 million in credit card fees (per billion dollars of revenue).
That's not an insignificant amount of money. For a small business like ours, unnecessary additional fees cut into our bottom line. Add in the fact that none of our clients have decided against working with us because we don't accept cards, and we're not in a rush to change our policy anytime soon.
Jason Unger is the founder of Digital Ink, the creative and digital team that provides custom website design and development, graphic design for print and digital, WordPress consulting and website management.