Thread: Do you accept credit cards ?

Reading the post titled "Negative story in local paper" made me think about this.

Many small shops complain about not being paid within the net 30 time. So I was wondering, those of you not receiving payments on time, do you accept credit cards? Have seen several posts of people complaining about the credit card fee. Was curious if there is a correlation between those of you not accepting credit cards also being the ones not getting paid on time. (I know not being paid on time, kind of goes with the job, but some seem to be worse than others)

I know when I send work out, if I can pay with a credit card I pay the day I receive the parts, or if the billing cycle ends in a few days I will wait, and let the supplier know I will be paying on X day. That way the supplier gets paid on time, and I actually get more than net30. In the event I can't pay at delivery if I pay at the end of the 30 days, and my credit card just started a new billing cycle I can almost have 90 days from delivery to actually having to pay, with no added fees and my supplier being paid on time.

I'm an engineer at a Fortune 500 company and any shop doing small jobs for us (< $3000) would be wise to take a credit card. Our purchasing people default to 90 day terms, 30 if you're persistent. If you want paid in a reasonable amount of time you'll accept a credit card. I always throw small jobs to a shop that takes a credit card because the process of getting a P.O. cut is so time consuming. Go ahead and pad your quote a few percent to cover the credit card company's cut - I don't care since I don't have to competitively quote small jobs. Those few percent are a lot less than the several hundred dollars in wasted man hours getting a P.O. through our system so it actually saves my company money.

Once I started taking credit card my cash flow problems almost disappeared. I can get payed right now instead of waiting weeks or longer. I love my credit card company.

I definitely agree about be able to take credit cards when accepting company payments. I've seen a big change in this over the past 10 years, back then most companies weren't set up to pay with a credit card even on small orders but since then its really changed, I always ask for credit card payment first on smaller invoices and I'd say about 50% of the time the companies accept, especially if you imply that its required to get the order processed quickly.

Setting up a "merchant account" can be a pain in the rear but there are some companies out there like PayPal that have made it a lot easier, you can be up and running with them pretty quickly and there rates aren't too bad compared to a full blown merchant account.

Paul T.
Power Technology

I've rarely been asked if I could take credit card, usually for smaller amounts, or in the case of when I said it was now all COD but it in no way justified going through the trouble to set it all up just for a few very little jobs. I'd rather not do them at all if I'll have to go through that much extra PITA at the moment. ROI ain't there.
Most companies are quite picky about PO's and how it all gets tracked in their system and I know some no longer allow credit cards to be used for anything other than a pack of gum at the corner store since they don't have an account set up there. The couple customer I have that take longer than 30days don't pay credit card.

So I don't take credit cards yet, I probably will if I ever get into doing more smaller jobs for individuals or selling my own products, if I ever get to that.

I don't take credit cards and the only ones who ask are retail sales for my product line. Most of my sales for the product line are exported wholesale. I might lose one or two $50-100 retail sales a year by not taking credit cards. Most of my billing is job shop work, and I only have one regular customer who pays less than 60 days. I would love to get paid 30 days but that doesn't seem to be the norm these days. I cannot see any of my regular customers paying with credit cards especially the one who is too far behind right now.

If you are going to accept business from the U.S. Federal Government, do please consider accepting credit cards.
Back when I was a Contracting Officer for the US Navy, the cards were "standard" VISA cards. Its been several years since I've practived that particular evil so the "brand" of the current card many have changed.

Some additional info:

Federal Acquisition Regulation
FAR 13.301 Governmentwide Commercial Purchase Card:
Agency procedures should NOT limit the use of the Governmentwide commercial purchase card to micro-purchases. Agency procedures should encourage use of the card in greater dollar amounts by contracting officers to place orders and to pay for purchases against contracts established under Part 8 procedures, when authorized; and to place orders and/or make payment under other contractual instruments, when agreed to by the contractor. See 32.1110(d) for instructions for use of the appropriate clause when payment under a written contract will be made through use of the card.

(c) The Governmentwide commercial purchase card may be used to—

(1) Make micro-purchases;

(2) Place a task or delivery order (if authorized in the basic contract, basic ordering agreement, or blanket purchase agreement); or

(3) Make payments, when the contractor agrees to accept payment by the card.

Stan Db

Most of this discussion is about using credit cards to manage cashflow, try to separate the two.

Look at the volume of transactions to determine credit card use. If it's large volume use the credit card facility is worth while.

For cashflow, use an enforceable agreement with clients, especially regulars. Make your quotes with the price $* per payment terms. Offer a 3% discount for payment within 7 days of supply, increase of 7% for 30-45 days, 11% 45-60days.
If your business looks to win a BIG job that requires material purchasing to spike then you need the client to fund the material purchase up front.

Your in Business, not "in Hobby", you need to make money not give it away. Any accountant worth his bag of beans will quickly show you the profit to be made out of paying suppliers late and having clients pay early, then show you how lean stocks are better profit centers then a rack of leftovers for that maybe job. Just dont believe their under/over recovery pricing model, it will put you out of business, in this instance it's better to listen to the market demand then what you want to make and stock.
ahh I feel better getting that off my chest!

Originally Posted by Punkinhead

I'm an engineer at a Fortune 500 company and any shop doing small jobs for us (< $3000) would be wise to take a credit card. Our purchasing people default to 90 day terms, 30 if you're persistent. If you want paid in a reasonable amount of time you'll accept a credit card. I always throw small jobs to a shop that takes a credit card because the process of getting a P.O. cut is so time consuming. Go ahead and pad your quote a few percent to cover the credit card company's cut - I don't care since I don't have to competitively quote small jobs. Those few percent are a lot less than the several hundred dollars in wasted man hours getting a P.O. through our system so it actually saves my company money.

Same here. We can buy almost anything under a couple thousand dollars with AMEX, no questions asked, just get a receipt. Vendor doesn't need to be set up, etc. A PO, on the other hand, is a big pain in the butt. And if it is a new vendor that is not in the system, forget about it. New vendors for POs involve W9 forms, negotiating terms (you will need to fight to do better than Net 60), etc. If you don't take plastic, unless it is something we absolutely cannot get from anywhere else, we will just go to an existing vendor, even if it costs more. I hate it, but that's how it is for us and apparently other large companies. Regular production parts obviously are a different story- it's easier and more worthwhile to set up a vendor when you are dealing with repeat orders and/or higher volumes, and generally materials for production aren't ordered by credit card anyway. I'm talking things like tools, equipment, repair/maintenance machining, occasional one-off emergency production parts, etc.

Originally Posted by Besser

Most of this discussion is about using credit cards to manage cashflow, try to separate the two.

Look at the volume of transactions to determine credit card use. If it's large volume use the credit card facility is worth while.

For cashflow, use an enforceable agreement with clients, especially regulars. Make your quotes with the price $* per payment terms. Offer a 3% discount for payment within 7 days of supply, increase of 7% for 30-45 days, 11% 45-60days.
If your business looks to win a BIG job that requires material purchasing to spike then you need the client to fund the material purchase up front.

Your in Business, not "in Hobby", you need to make money not give it away. Any accountant worth his bag of beans will quickly show you the profit to be made out of paying suppliers late and having clients pay early, then show you how lean stocks are better profit centers then a rack of leftovers for that maybe job. Just dont believe their under/over recovery pricing model, it will put you out of business, in this instance it's better to listen to the market demand then what you want to make and stock.
ahh I feel better getting that off my chest!

Do you own and operate a business or you just reciting what a book on running a business says to do? The above works in a perfect world, and in certain lines of business, but not all.

smart phone card readers and companies like paypal have made accepting credit cards, at least for small amounts, a no brainer.

square up is worth the 3% they charge
i'd rather have 97% of something than 0% of a sale i didnt make

Originally Posted by toag

square up is worth the 3% they charge
i'd rather have 97% of something than 0% of a sale i didnt make

We just started using square, it's a no brainer compared to going with a bank cc system for those once in awhile transactions!

Originally Posted by JB @ C and L Machine

We just started using square, it's a no brainer compared to going with a bank cc system for those once in awhile transactions!

Can you accept credit cards with a number over the phone?

Originally Posted by rj newbould

Can you accept credit cards with a number over the phone?

Yes, but its more $$$$$$. We are still really new to this!

Originally Posted by toag

square up is worth the 3% they charge
i'd rather have 97% of something than 0% of a sale i didnt make

That's the coolest thing I've seen in a while. I just set up an account and have a card reader on the way.

Transparent Pricing

2.75% per swipe for Visa, MasterCard, Discover, and AmEx
Manually-entered cards cost 3.5% + $0.15 per transaction
No merchant account, monthly fees or set-up costs
Deposits available next business day for card-swiped transactions

Those rates are really bad, but only marginally worse then what you will get almost anywhere with entry level / little to no volume pricing.

We are not a job shop, we manufacture our own line and sell it retail and wholesale- but we basically only do credit card, cod, or wire transfer on 99% of orders and we require it up front. At least 75% of people just slap it on a credit card.

Be aware that while your risk of them paying late is gone, there is a new risk- credit card fraud is running rampant these days. We have a fairly extensive check list of dis-qualifiers for an order, which almost always mean it is fraudulent. We just automatically refund the orders and ask them to send a wire transfer. The credit card companies DO NOT protect you from fraud, and they do not EVER cover it- the merchants eat it- so be aware of that.

Originally Posted by peter.blais

Those rates are really bad, but only marginally worse then what you will get almost anywhere with entry level / little to no volume pricing.

Agree but the great thing about square, paypal etc, is they don't have a monthly minimum, so if you are just getting started or don't do a lot of credit card processing its good. Especially the square, you can walk in a customers shop and get payment from them right there, instead of trying to get them on the phone, harder to make excuses in person.

I have one customer that requires that I accept payment via a credit card. It has worked out great, payment deposited into my account usually in two business days. Yes, there is the 3% deductions per transaction but this customer's jobs pay well so I can suck it up. However since the banking fiasco, I have noticed my monthly merchant account fees have doubled to about $50 a month whether I receive a payment or not. I think I will be looking into Square or one of their competitors and soon because $600 fees are getting a little ridiculous, especially since they got themselves into that situation

As to the poll, any account over 30 is a problem.



I take CC for the few companies that can "run it thru on a CC" without all the formal BS of a PO....often it is the reason for getting these orders.

Also helps for those "one off" jobs that you'll never see guy again and cash is not in hand.
I'll take my chances with a CC over a check.


Smart phone is the ticket for me...no more monthly anythings, rates are still in line with merchant services with no machine purchase or rental or upgrades or...



It is also a way to offer customer Net/30 along with a payment plan, if they so desire...yet I get paid tomorrow.