Should I accept Credit Cards At My Daycare?

Sunday, August 6, 2017

 

It's funny how technology can change the way we do everything including paying for our child's daycare!  If you own a daycare center, you may have found yourself wrestling with the question; to accept credit cards or not to accept credit cards that is the question....the answer?  Depends on your business model and your desired end result!
 
#1-  'IF IT AIN'T BROKE DON'T FIX IT!'
This may seem like strange advice coming from a credit card processing company but if your current business model does not accept credit cards and you are not experiencing any 'kickback' or other pain points with payments- then it would be silly to add credit card processing.  A wise person once said- "if it ain't broke, don't fix it".  Some signs that you might need to consider adding credit cards would be:
  • LATE PAYMENTS:  If you have parents, like lots of Daycare operators do, who are BUSY and sometimes forget their checkbooks, it might be time to consider accepting payments (we will look at some options later).
  • LOST BUSINESS:  If you are losing business because Daycare B (up the street) takes credit cards and you do not, it may be time to consider making this form of payment available to new clients.
  • INQUIRING PARENTS:  If your clients are always asking you if they can use their card (for either convenience or miles), then it might be time to consider plastic as a form of payment.
 
#2-    ADDED CONVENIENCE TO YOUR PARENTS (and YOU)
Today we use our credit cards like we used to use our checkbooks and our cash!  Since daycare is definitely an item that needs to be budgeted for, it makes sense that this line item would naturally be a good fit for credit card payments.  Offering your parents the ability to automate the payment process with your daycare can make working with you even easier.  Not only do their children get great care, but you reduce the frustration related to having to remember when to bring in the payment!  In addition, having a steady stream of income can also help your company budget for expenses and minimize the frustrations related to parents who accidentally forget to bring their checkbooks.  Automating some of your payment processes also frees you up to do what you do:  taking care of peoples' most important people!!
 
#3-  BUSINESS GROWTH & PROCESSES
When you are wonderful with children- the parents talk:  ABOUT YOU!  This means your business will naturally begin to grow.  As your business grows, you will want to make sure you have processes in place to have either automatic payments, invoices with payment links or a web site with a payment option available for your clients.  These tools make the financial part of your business easier to deal with and easier means you have more time to focus on growing your business.  You can also use the Visa/MasterCard/American Express and Discover logos in your advertising to let parents know they have multiple payment options when they work with you.

DIFFERENT WAYS TO ACCEPT CARDS
Once you determine that you want to accept credit cards, now you get to decide HOW.  A quick call with a member of our team can certainly help guide you in the right direction but here are a few tips to make the decision making process easier for you. 

  • PAY AS YOU GO-  If you just have a few parents that really want the convenience of paying with a credit card but the monthly volume will be minimal (under $1500) then the pay as you go options (Like Square or our product PhoneSwipe) offer a great tool with no monthly fees and a simple bundled rate percentage that covers everything.  If this is the right choice for you now, just make sure that when your business begins to grow you consider other, less costly options.
  • TRADITIONAL MERCHANT ACCOUNT-  If your monthly volume commands a more aggressive pricing structure, a traditional merchant account is a great choice.  They do have some ongoing fees but the percentages you pay are  lower than the Pay As You Go options and your overall effective rate for accepting credit cards can be reduced substantially.
  • ONLINE & MORE-If you have a web site and you want to make more tools available to your parents- adding a PAY NOW button to your site may do the trick!  How about letting your parents TEXT a payment to you?  Depending upon your clientele, these tech savvy options may be just what they are looking for- anything to keep the payment process outside of your day to day business interaction can deepen relationships and make the payment process that much easier.
DOWNSIDES TO ACCEPTING CREDIT CARDS-
It would not be a complete article without mentioning some of the downsides to accepting credit cards because as much as we hate to admit it- there are a few!!
  • COST:  Accepting credit cards will cost you anywhere between 1.5% to 3.5% depending on the types of cards your parents elect to use and the way you accept the cards.  Determining how you want to handle the cost (increase your prices, charging a convenience fee) is an important consideration. 
  • DECLINED CARDS:  Not much different than a bounced check, you can have cards that decline so you will want to make sure you have a policy in place for when this happens.  The good news is you will know as soon as the card is processed if the card is good.
  • DISPUTES:  If a parent elects to dispute the credit card charge with you, you will need to be able to prove you A- had permission to run the card and B- that you provided the services they paid for.
At the end of the day, you will need to determine if accepting credit cards will help you systematize or grow your business and if the answer is YES- the next step is just determining which of the many options available would work best for you.  Our team at TMC is dedicated to helping you find the right answers - even if the answer is 'you do not need to take credit cards'!  So give us a call and let us work through the question:  to accept or not to accept credit cards?  We will find the right answer for you!
 
Cheri Perry 8/6/2017

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