Credit cards are a great way to accept payments from customers. They’re convenient, easy to use, and can help you quickly build the revenue you need to grow your business. If you’re an independent moving company that accepts credit card payments, it’s crucial to understand how these payments work. Do you know how processing fees can affect your profit margin, or how to deal with chargebacks and inquiries from credit card companies?
In this article, we discuss how independent moving companies can benefit from accepting credit card payments. We also outline how to process payments to avoid risk, and tips for navigating customer disputes like chargebacks.
Why accept credit card payments as a moving company?
Accepting credit card payments offers a variety of benefits for moving companies and their customers. Most consumers prefer to pay by credit card because it’s convenient, establishes a transaction record, and reinforces a contract between a customer and their service provider. Additionally, accepting credit cards accelerates the payment process, saving your company time and energy that might otherwise be wasted chasing past-due invoices or navigating delays and errors related to personal check processing.
With all the benefits credit card payments offer, adding them to your moving company’s payment options seems like a no-brainer! To ensure you’re set up for success – and not spending countless hours disputing chargebacks or processing fees – we’ve put together a handy guide that breaks down how to accept credit card payments, fees to be aware of, and chargeback navigation.
Learning how each of these components of the payment process affects your business will help you make more money faster and with less hassle.
How to Accept Credit Card Payments as a Moving Company
Firstly, to beginaccepting credit card payments as a business, you’ll need to establish a merchant account. This is essentially a bank account for your business. To get paid, it’s necessary to work with a payment services provider, which enables merchants to process credit card payments. Credit card payments are very popular, and savvy entrepreneurs will reap the benefits of setting up a merchant account and encouraging their customers to quickly and conveniently pay for goods and services. Unlike checks, which are prone to errors, overdrafts, and delays, credit card payments are authorized and deposited within 2-3 business days.
There is a downside to the convenience of accepting and receiving quick, cashless payments. Credit card payments result in processing fees that typically range from 1.5% to 3.5%. These fees can increase for merchants like moving companies that take credit card payments over the phone. Credit card processing fees can eat into your profits if you haven’t planned for them!
Some companies attempt to outsmart credit card processing fees by accepting payments through peer-to-peer services like Venmo and Paypal. If you’re considering this approach, do your research! These services have verystrict terms regarding business use and offer no protection from payment disputes, which places your company at risk.
What is a Credit Card Processing Fee?
A credit card processing fee is the percentage rate a merchant pays to a merchant services provider to process a credit or debit card sale (typically 1.5-3.9% of the transaction total). Processing fees consist of two major components:
Interchange fees – variable fees paid to the bank that issues the purchaser’s credit card
Network fees – (also referred to as assessments or association fees) fees paid to the credit card company for the convenience of using their network to process a payment.
Another way to think about credit card processing fees is the total fees associated with processing a payment. This is referred to as an effective rate. An effective rate is the total amount you pay for processing credit cards, including additional transaction fees the processor may charge to process your customer’s payment. On your statement, these charges might appear as:
Finding out your effective rate is really simple. On your monthly processing statement, divide the total fees you paid by the total revenue you collected for your services. This is your effective rate.
For example: if your monthly statement lists $70,833 in revenue and $2797.90 in fees, your effective rate would be 3.95%.
Credit card processing fees vary widely, impacting the effective rate a business pays to process a transaction. High processing fees can impact your profitability, especially if you’re unaware of how transaction fees inflate your effective rate. Therefore, research is key to choosing the right processor for your business!
At Oncue, we’ve partnered with Stripe to process credit card payments for our independent moving company clients. We’re proud to offer a 2.99% transaction fee, which is less than the industry average of 3.5%. Get in touch to learn more about how we’re supporting independent movers.
In conclusion: any merchant who accepts credit card payments must pay fees to the issuing bank, credit card company, and the payment processor to offset the costs and convenience associated with cashless, immediate payment.
If your moving company is currently accepting credit card payments, chances are you’ve fielded at least one chargeback request from a credit card company. What is a chargeback? Simply stated, it’s a customer-initiated process to dispute a charge for products or services. Sometimes the dispute is valid, and the customer has a good reason for disputing it, but other times, the chargeback is erroneous. Resolving disputes in your favor can drain your time and resources. Becausemoving companies are considered a high-risk merchant, you might spend more time disputing chargebacks than other small business owners!
In a typical chargeback scenario, a customer will reach out to a credit card company to dispute a charge. From there, the customer’s bank will either submit:
an inquiry to the credit card company, asking for more information or evidence related to the dispute
a chargeback from the credit card company, resulting in an immediate withdrawal of funds from your account, including processing fees.
Contacting your customer by phone to confirm the validity of the charge
Completing a transaction review by gathering and submitting evidence related to the job
Awaiting the findings of an inquiry or chargeback review, which usually takes 65-75 days.
Small businesses must remain efficient to stay profitable. For independent moving companies, time spent trying to reach customers or discuss chargebacks with a credit card company could mean the difference between booking a new job or missing out!
Moving company software can help automate manual processes and organize information to help busy moving companies stay in the game. A moving company Customer Relationship Management (CRM) system can manage customer data, making it easy to view and respond to client inquiries, automate communication, and collect payments.
Some CRMs offer expanded support options, like booking services, concierge customer service, and payment dispute resolution.
Bottom line: Should My Moving Company Accept Credit Card Payments?
Yes. Accepting credit card payments makes sense because it’s easy for your customers and convenient for your team. Furthermore, doing so ensures your business receives revenue immediately and establishes a record of services rendered if a customer instigates a chargeback or doesn’t pay their bills.
We recommend partnering with a moving software – or moving CRM – to help you quickly and effectively manage end-to-end credit card processing and dispute resolution. CRMs streamline operations and ensure a positive, consistent customer experience, freeing you up to focus on strategic responsibilities.
CRMs also provide valuable insights into your customer base, organize information, and help resolve payment disputes quickly and professionally.
Oncue’s comprehensive moving company software reduces the time moving companies spend collecting payments by effectively managing end-to-end credit card processing. Our Customer Success team is also on hand to help navigate payment issues. If you’ve spent hours fielding chargebacks and inquiries from credit card companies, then you can rest easy knowing your Oncue Customer Success Manager will work with you to help resolve these matters in a timely manner. Allowing you more time to focus on your customers and your business.
Minimize headaches like navigating payment issues and enable your team to spend less time in the office and more time booking jobs with Oncue!
In the market for a moving software solution that supports your growing company with intelligent tech and payment processing solutions? Get in touch with us today and learn how Oncue’s solutions can help.