A growing number of family child care providers are receiving parent payments through an electronic transfer of funds from the parent’s bank account to their bank account.
In a previous article I wrote about family child care providers who accepted credit card payments from parents.
Using electronic bank transfers has some of the same advantages as accepting credit cards: saves time by not having to travel to the bank, reduces or eliminates bounced checks, makes keeping track of payments easier, and it’s convenient for parents.
In addition, electronic bank transfers have the advantage of allowing parents to pay you from their work or at home. You can also set up a reoccurring weekly, biweekly or monthly payment schedule so you don’t have to constantly remind parents to pay you.
Here’s the way electronic payment transfers work.
You and the parent would agree to allow electronic transfers from a parent’s bank account to your bank account. You would also agree on the amount of the payment and when the transfer will be made. Usually there is a day or two between the time the money is taken out of the parent’s bank and the time it’s available in your account.
I’m old enough to remember being nervous about using the Internet for money transactions. Today’s security systems are strong enough not to worry about this.
If you are interested in setting this up for your business, contact your local bank. Fees vary.
Childcarepay.com is a popular company used by many child care providers to electronically transfer funds. It is also available to users of the Minute Menu record keeping software program. The cost is $1 per transaction.
As with accepting credit cards, you should understand the fees involved before going ahead. If you have five parents paying weekly using the Minute Menu plan, it would cost you $5 a week or $260 a year. You can pass on these bank fees to parents if you wish. If you are having trouble collecting fees in a timely manner from one parent, you could require that person to pay you using a credit card or electronic bank transfer.
What has been your experience with electronic bank transfers?
Tom Copeland – www.tomcopelandblog.com
Image credit: www.minutemenu.com