Want to Get Paid Quicker? Time to Go Contactless

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So, you say your business accepts only cash or checks. That may have worked a few years ago, but times have changed, and your customers want convenience when it comes to doing business with you … and, more importantly, when paying you.

With the pandemic, consumers’ expectations have shifted dramatically. They’ve got more choices than ever when it comes to solo service providers and small businesses, and they expect you to put them at the center of everything.

The smartest business owners are already customer-centric, but how does that change the game for getting paid? Your customers practically live on their phones, and they prefer to conduct all their transactions from the palm of their hand.

They’re also worried about cleanliness of point-of-sale signatures and touch pads. In fact, the vast majority of consumers say they’d rather skip signatures altogether.

The Growth of Contactless Payments

Here’s a powerful statistic: 65 percent of consumers prefer to use contactless payments, and that number is sure to grow. So, you may be asking: What are the ideal contactless payment options? Right now there’s quite a bit to choose from, so the key consideration often is, what’s right for solo service providers and small businesses as they transact with customers:

  • ACH (or bank draft) payments that are digitally taken from a bank account.
  • Payment processing services, such as ThryvPay, PayPal, Venmo, etc., that can be set up to process payments through your client’s credit card or bank account.
  • Digital wallets like Apple Pay or Google Pay.
  • Keeping your customer’s credit or debit card on file in your CRM, and scheduling recurring payments through your preferred payment processor.

Yes, there are associated costs for your business to provide contactless payments, but it’s important to note that 47 percent of consumers say they won’t do business where contactless payments are not accepted. So, you’re probably starting to see the writing on the wall … save a little now … or lose business entirely.

Credit Cards vs. ACH

As a business owner, you’ve got options, too. Here’s a quick overview of the pros and cons of accepting credit cards vs. ACH:

Credit Card Pros:

  • Using credit card processing, you’ll likely have next-day funding. We call it speed-to-cash.
  • Your customers are already familiar with the convenience of credit cards, and can probably type their account numbers faster than their children’s birth dates.
  • Great option for small payment amounts.

Credit Card Cons:

  • Transactions can get expensive, from $1.50 to over $4 per payment. Since the fees vary so much, it’s hard to know what you’ll be charged at any given time.
  • Almost no upside for very small purchases.

ACH Pros:

  • Lower transaction fees than credit cards.
  • Payment processing companies can provide certain services that will be able to tell you, in real time, if the money is available in the customer’s bank account (i.e., no more bounced checks).
  • Ideal for large payments, since ACH fees are usually maxed at a certain amount.

ACH Cons:

  • Delay in cash, typically five to seven days, based on each bank.
  • Susceptible to insufficient funds (without real-time verification).

Here’s how a business would pay using either of these options via ThryvPay:

A small business, trying to avoid their typical 2.9 percent credit card processing fee (with no maximum), has resorted to asking their customer to write a check. However, offering to accept ACH would give them a break with a 0.9 percent fee (or a maximum of $9).

So, if the business is invoicing a $5,000 transaction, the ThryvPay user pays the maximum flat rate of $9 when processing through ThryvPay ACH.

However, that same $5,000 processed via credit card, with a 2.9 percent processing fee, would cost the business $145. That’s a $136 savings that goes directly to the business. 

Plus, they do not have to collect paper checks, run to the bank for deposits or worry about bounced checks, thanks to ThryvPay’s real-time funds availability confirmations.

What about Security?

This is a great question, because while your customers want convenience, they also expect safety and security when it comes to paying digitally.

Payment processing services must meet what’s called the Payment Card Industry PCI Data Security Standard (PCI DSS) for storing credit card or banking information. This is protocol that ensures cardholder data is protected. As a business owner, you can do your part as well. For instance:

  • Do not write down a customer’s credit card number.
  • Do not store credit card numbers in Excel, Google Docs, phone notes, etc.
  • Do not have customers provide credit card numbers via SMS text.

The best option is to use secure forms and card-on-file procedures through your website or client portal that are tied to your CRM system.

Best Practices for Accepting Contactless Payments

Offering a variety of payment options will create customer loyalty and give you the opportunity to save on processing fees. Opting for a service like ThryvPay will also provide options such as scheduling recurring payments (e.g., for monthly services); adding tips to the payment; passing on convenience fees to cover your transaction costs; and more. 

Keep in mind: If you decide to charge convenience fees, you must offer multiple ways for your customers to pay. So, what they’re actually paying for is the convenience of using their credit card.

Make It Easier for Customers to Do Business with You

If you want to get ahead of your competition and set yourself up for long-range success, adopting contactless payments should be step number one. From there you can do even more, such as sending invoices and accepting payments through SMS text, for example.

Your customers expect an easy, modern and digital experience with every business they encounter. You now have options to deliver just that and compete like never before.