Credit Card Processing for Lawyers – Attorney Privilege
If you run an individual law practice or a small law firm, but profits aren’t quite what you had hoped they would be, you may be surprised to learn that accepting credit cards can be the solution you’ve been waiting for. Credit card processing for attorneys can help improve your ability to collect accounts receivable and thereby improve your cash flow and profits. Credit card processing for attorneys isn’t as complicated or expensive as many people think it is, and it has many surprising benefits.
Many attorneys wait until they have finished their work to bill the client, but this opens the door for clients to receive services without paying for them. It is much better to request retainer fees and other advance payments upfront. When these payments can be made via credit card, clients are surprisingly receptive to the idea. In part, this is because they know that if for some reason you don’t deliver those services, they can always initiate a chargeback (disputing a charge) through their credit card company. It also helps that for many people credit cards don’t feel like “real” money, so they are more willing to make advance payments before having received your services.
Small law firms or individual law practices that bill their clients only after they have provided services are often stymied by the need to be their client’s advocate while simultaneously being a creditor. These two roles place opposing demands on the attorney. It is difficult to passionately argue in your client’s best interest when there are outstanding bills to be paid. Both the lawyer and the client feel uncomfortable in that situation. Fortunately, credit card processing for attorneys provides an easy solution.
When you let your clients pay by credit card, you free yourself of the role of creditor, instead allowing the credit card company to play that role. In this way, you can focus on your primary role of advocate, ensuring that you act in the client’s best interest at all times. As described above, this is especially true when you accept the credit card payment as an upfront retainer fee, so that you receive the funds in advance. After all, you can always refund money to your client later, but it’s much better to have the money before the work is done than to request payment (perhaps in vain) after you have finished all the work.
Many attorneys are leery of letting their clients use credit cards as a payment method, because they believe that their practices are too small to justify the expense of credit card processing, as it will negatively impact their bottom line. They have heard horror stories about the hidden fees and misleading policies associated with traditional credit card processing services, and therefore prefer to rely on cash and check payments. Yet credit cards are often the simplest, most direct way for your clients to pay you, and the process isn’t as expensive as you may fear.
Traditionally, attorneys and other professionals working individually had to secure an expensive, traditional merchant account and then buy or lease a credit-card-swiping terminal. Then, each time they wanted to process a payment from a client, they had to make a carbon copy of the card and call to request authorization. This was not only expensive, but also time-consuming and a distraction from the professional’s main line of work. Fortunately, today there are better options – specifically mobile credit card processing for attorneys.
Small business owners and professionals, including many attorneys, find that mobile credit card processing is an excellent option for their work environment. It allows them to accept credit or debit card payments from their clients wherever the work is done, without being tied to a fixed office. If you have a telephone, cell phone, or PDA (and who doesn’t?), then you already have all the equipment you need for mobile credit card processing. With this technology, you can easily request advance payment of all the anticipated fees, accepting your clients’ payment information on the spot.
Mobile credit card processing for attorneys is quick and simple to get started. First, you will need to get a merchant account, enabling your clients’ credit card payments to be deposited into your bank account. You may be able to apply for one through your regular bank, but this may be time-consuming and difficult, especially if you don’t have an excellent credit history. A much simpler and more straightforward process is to use the services of a merchant account provider that will help you open a merchant account with minimal fees as quickly as possible. The pragmatic “Dial Pay” or “Accept by Phone” program is an affordable, easy-to-setup program, offering you the convenience of using any phone to dial a toll-free number.
At the voice prompt, you enter the following information: your merchant identification number (provided by the merchant account processor), the client’s credit card number with expiration date and the sale amount of the transaction. Other optional key-in codes exist such as the merchant processor’s bank ID (again provided by the merchant account processor), the customer code of the cardholder and the sales tax. It is advisable, although not required, to expand the dial pay program and key in the customer’s address (so that you can perform an address verification match) and the CVV2 code. The CVV2 is a security feature of the credit card, found in the signature panel on the back of Visa, MasterCard and Discover cards, three digits long; American Express cards reveal the CVV2 code on the upper right hand side of the card, above the credit card number, and contains four digits. Inputting the CVV2 code ensures that the client has the credit card in his/her possession.
While keying in more information will lengthen the time to complete the transaction, it is better to include more information than less so that a given transaction will not downgrade to a non-qualified status, the highest discount (percentage) rate that can be assessed.
Dial pay offers inherent advantages, including the following:
- – It is relatively inexpensive to setup and use. While the discount and transaction fees are typically higher per transaction than those offered through other credit card programs, the monthly fee is lower than just about any other method to accept credit cards. In addition, many merchant account providers waive standard credit card fees for their dial pay program, such as the batch fee, monthly minimum fee, etc.;
- – The learning curve to use dial pay is not steep and attorneys can figure out the process within a couple of minutes. (I advise all lawyers to test the dial pay system with their own credit card first so that they can become comfortable with the dial pay process.);
- – It can be employed just about anywhere you are – as long as you have a working phone;
- – Record keeping is relatively easy. Monthly statements will be mailed to the merchant, listing all dial pay transactions for the month;
- – Transaction information is easily accessible. You can track batch totals and daily activity by dialing the dial pay authorization number and getting back into the system. Online reporting may also be available. Of course, any merchant account provider will have a history of your transactions, too; and finally,
- – Dial pay offers credit card processing capability to attorneys who do not operate their practice out of a physical location and/or those without an Internet presence.
Expounding on the inherent benefits of a dial pay program is not meant to negate exploring the option of accepting credit cards via a wireless or stationary credit card terminal. Depending on the nature of the lawyer’s circumstances, either payment vehicle may prove useful. Alternatively, a virtual terminal – a web-based interface where the clients’ credit card information is securely entered manually – may easily fulfill processing needs. (Please note that the discount and transaction fees associated to swipe a card are also less than the rates assessed to key in a transaction. However, it is imperative to examine all of a program’s relevant rates, including any startup and/or possible termination fees, to make an informed decision as to which service to utilize.)
In order to take your law firm’s profitability to the next level, lawyers need to investigate credit card processing options as a means to more effectively collect fees from clients for present, future, and even past, services rendered. In turn, clients will appreciate the ease and convenience of making payments using their debit and credit cards.
Once in place, your merchant account should run on automatic mode, causing little, if any disruption in your accounts receivable process. Attorneys can then concentrate on their core competency – feeling unburdened – knowing that they will be compensated for their efforts!