Author Topic: Accepting payment by credit card as a contractor  (Read 1309 times)

bognish

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Accepting payment by credit card as a contractor
« on: November 12, 2018, 02:06:41 PM »
I am leaving my current employer at the end of this week. There is a chance they are going to need some help in the future. I would prefer to do this on an hourly basis as a contractor. The company has a really shitty history of paying vendors and contractors so i would want to set up terms to be paid daily or weekly by credit card.  Does anyone have an easy solution for this?

Thanks

esq

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Re: Accepting payment by credit card as a contractor
« Reply #1 on: November 12, 2018, 05:36:41 PM »
I've had two businesses over the years where I accepted credit cards. Although it's been ten years since I last did this, I highly recommend doing your research, looking especially at fees charged. There was a point where I was using one particular service and it turned out I was getting ripped off on the fees. Switching was pretty easy. I'm sure there are small business people in the know talking about this somewhere online.

Probably doesn't apply to you, but when I had my jewelry business, my volume tripled after I started accepting Visa/MC/Discover. (Back in the early 2000's when people still wrote checks.)

Best of luck to you.

Saving in Austin

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Re: Accepting payment by credit card as a contractor
« Reply #2 on: November 12, 2018, 08:17:27 PM »
I accept credit cards through Converge which you can only get by signing up through Costco with a business membership.

The minimum fees are about $36 per month so unless you have lots of transactions it is not worth it.

The fees come out to about 2.75%-2.9% if you do at least a few thousand per month.

I also get paid through PayPal. That is more like 3% for larger transactions but there is no monthly fee.


terran

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Re: Accepting payment by credit card as a contractor
« Reply #3 on: November 12, 2018, 08:34:26 PM »
You could look into stripe and square. They designed more as online (stripe) and point of sale (square) payment processors, but they might let you manually enter a sale.

I think freshbooks lets you set up credit card payment options for invoices you generate through their app. It might be overkill if you don't need all the bookkeeping functionality they provide though.

You can certainly accept credit card payments through paypal if the person/company has a paypal account. I think it's also possible to pay a paypal account holder even if they don't have a paypal account, but that might require a special account type for the payee.

The advantage of these sorts of solutions is that you wouldn't need to have a merchant account large setup and monthly fees. I think most of these charge something like $0.30/transaction + 2.9% of the transaction.

You could also consider requiring advance payment without doing it through credit card.

Fishindude

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Re: Accepting payment by credit card as a contractor
« Reply #4 on: November 13, 2018, 09:30:54 AM »
Why do you want to work as a contractor for a company that has a really shitty history of paying contractors?
Find some different clients.

bognish

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Re: Accepting payment by credit card as a contractor
« Reply #5 on: November 13, 2018, 11:40:01 AM »
I don't really want to start my own contractor company. The company I am leaving has indicated they may have more questions for me after I leave. I want to get paid for that time, but I don't really trust them to mail me a check. I don't think this will be a long term business. It looks like Stripe might work for what I am after. I plan on charging them an exorbitant hourly rate, so I don't mind giving up 3%.

CNM

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Re: Accepting payment by credit card as a contractor
« Reply #6 on: November 13, 2018, 12:01:02 PM »
If you use quickbooks online, which I do for my side business, you accept payment via bank transfer without fees.  No chargeback as far as I know.

Syonyk

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Re: Accepting payment by credit card as a contractor
« Reply #7 on: November 13, 2018, 12:09:48 PM »
The company has a really shitty history of paying vendors and contractors so i would want to set up terms to be paid daily or weekly by credit card.  Does anyone have an easy solution for this?

An invoice that has a substantial discount for payment within net-30 terms (or net-15, whatever).  Your discounted rate is your desired rate, the 20% higher "if you take a long while to pay me" rate is just a penalty rate, and tack on 2%/mo interest.

Then a policy of not working many hours ahead of what you've been paid, and/or a retainer agreement.

Swish

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Re: Accepting payment by credit card as a contractor
« Reply #8 on: November 13, 2018, 04:27:30 PM »
I use Square and it is very user friendly and easy to set up. I build their fees into my prices and charge for all sorts of side hustles. The convenience of getting paid soon and on time is well worth the fees. Everyone has a credit card so I ask for it in advance and bill them as soon as they are happy with the work.

Goldielocks

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Re: Accepting payment by credit card as a contractor
« Reply #9 on: November 14, 2018, 10:49:44 PM »
I would not use a CC, and I already have the SQUARE system, so it would be easy. Why? Mainly because the charge can be denied after the fact and reversed.

I have also seen other contractors SOL for 1-2 months of wages due to unpaid invoices when a company goes bankrupt.

The only solution is to ask for an up-front $$ to start work.   e.g, if you think you will work 40 hours in the month, ask for 20 hours upfront and bill the remainder ASAP on your very last hour, or at month close.   Refuse to carry more than 1/2 month of hours owing (by refusing to work).  Ensure that your out of pocket costs never exceed the up front money, your only risk is your profit portion.

Vendors ask for up front payments all the time.  Even if your other contractors don't do this, you can.

MaaS

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Re: Accepting payment by credit card as a contractor
« Reply #10 on: November 15, 2018, 07:31:21 AM »
I would not use a CC, and I already have the SQUARE system, so it would be easy. Why? Mainly because the charge can be denied after the fact and reversed.

I have also seen other contractors SOL for 1-2 months of wages due to unpaid invoices when a company goes bankrupt.

The only solution is to ask for an up-front $$ to start work.   e.g, if you think you will work 40 hours in the month, ask for 20 hours upfront and bill the remainder ASAP on your very last hour, or at month close.   Refuse to carry more than 1/2 month of hours owing (by refusing to work).  Ensure that your out of pocket costs never exceed the up front money, your only risk is your profit portion.

Vendors ask for up front payments all the time.  Even if your other contractors don't do this, you can.

Yeah, I consult for a living and completely agree with you here. If you don't trust the company, you need to get at least a partial payment upfront.  Everyone gets stiffed eventually given enough time.

2.9% is essentially the going rate for taking CC's. On a positive note, these fees are tax deductible, so the net cost is a bit lower. I just use PayPal because I'm comfortable with it. If it's a big project, I'll opt for a bank transfer or physical check instead.