Card Payments for LTD Co.

[dingdong]

Check out square now that they have launched in the UK (squareup.com)

Simplifies the admin and setup required - you take card payments using your phone for a fixed percentage fee per transaction.

[SueEllen]

I would not touch him he has history.

With English like that you look like a spammer

[Mark2009]

I'm negotiating directly with a client who has a history of late paying suppliers so to mitigate this I am looking to get setup as a card merchant to accept card payments for my LTD Co.'s services to improve cashflow and not having to chase for payment for weeks or months. Has anyone else has this setup for their LTD Co.? Aside from the merchant fee that I will pass on in the daily rate are there any other pitfalls to having this?

I would not touch him he has history.

[redgiant]

IF you decide to use merchant processing services, and that's a big IF, because in your case it does not seem to make sense, then I'd recommend Barclays, don't use Lloyds Cardnet.

Thanks.

I know some here are skeptical as they may not have been paid this way before and directly from a client but it does seem to be a win/win in this scenario if the dispute process is acceptable. I'll post up what I have decided later next week.

[AtW]

IF you decide to use merchant processing services, and that's a big IF, because in your case it does not seem to make sense, then I'd recommend Barclays, don't use Lloyds Cardnet.

[redgiant]

Because they don't have the cash but do have a credit card.

Does sound decidedly fishy though.

Even the largest of clients have issues paying their bills even if they did have the cash. A large UK supermarket I did consultancy work for several years ago had major delays paying their suppliers (>180 days) that was in breach of contract. They got away with it as they were one of the big four and could bully suppliers which sometimes resulted in walkouts, delayed shipments to stores etc. Luckily I was going through a middleman (consultancy firm) so it was their problem to chase payment instead but it did and probably still does cause suppliers to suffer cashflow issues and even go under.

This potential client isn't the same size but still a large business which has seasonal increases in cashflow so they use credit cards to have unsecured debt (along with bank loans etc.) to ensure they can keep trading throughout the year ... it's not fishy and usual business practice. Aside from the unsecured debt there is another benefit for the client as well as they get benefits from increased card spend. They also currently pay other suppliers through their corporate purchasing card too including those that provide consultancy services so it's familiar and convenient to them to pay for services in this way.

As for the card merchant provider it's a month to month contract with no exit fees (similar to Stripe's model it seems but directly with a credit card company that I have contacts in) but I am checking with them the dispute process if I have an approved signed timesheet from the client. I've never had a dispute with a client on my services ... but there is always a possibility!

[Lance]

Because they don't have the cash but do have a credit card.

Does sound decidedly fishy though.

Very fishy.
And a credit card has the extra dimension that you have another contract with the credit companies so every payment has 3 contractual ties. If it goes wrong it'll get really messy.

[VectraMan]

Why would the client agree to pay by card instead of a transfer?

Because they don't have the cash but do have a credit card.

Does sound decidedly fishy though.

[FrontEnder]

Why would the client agree to pay by card instead of a transfer?

I don't see how it would help mitigate the risk of late/non payment. If they don't have the funds when they need to pay you, the payment method doesn't matter.

[Jessica@WhiteFieldTax]

Pitfalls, I think, are other than costs, the risk of chargeback if there is a dispute.

In terms if setting up to receive cards, I'm blown away by Stripe. Inexpensive and efficient, it's a good business disruptor for the banks and PayPal.

[redgiant]

I'm negotiating directly with a client who has a history of late paying suppliers so to mitigate this I am looking to get setup as a card merchant to accept card payments for my LTD Co.'s services to improve cashflow and not having to chase for payment for weeks or months. Has anyone else has this setup for their LTD Co.? Aside from the merchant fee that I will pass on in the daily rate are there any other pitfalls to having this?