Do You Accept Credit Cards from Parents?
Collecting payments from parents can sometimes be complicated. Some parents pay late, sometimes the parents want you to wait before depositing their check, or sometimes the check bounces.
Collecting payments from parents who receive financial subsidies can be more problematic.
One way some family child care providers are handling parent payments is through the use of credit cards.
Accepting credit cards has these advantages over checks: saves time (no trips to the bank), provides instant verification of payment and quicker access to the money (usually the next day or two), and is convenient for parents who forget to bring cash or a checkbook.
The main disadvantage of accepting credit cards is the cost.
Credit Card Companies
Some credit card companies charge transaction fees only. Companies such as Square, Payanywhere and Intuit-gopayment offer a free device you can attach to your smart phone or computer that allows you to swipe a credit card. Fees range for each swipe of a credit card.
Other companies charge monthly fees as well as transaction fees. Most companies will accept all major credit cards: VISA, MasterCard, American Express, Discover Card, etc.
I asked child care providers on my Facebook page for their experiences and opinions about credit cards. A few offered this service and found it was a convenience for them and their parents. They offer this as an option, not a requirement. One provider said it has increased her business with parents who use her on a part-time basis.
Most child care providers did not accept credit cards and either had bad experiences with them or would not accept them. The primary reason why they don't offer credit card services is the cost. Some paid as much as $100-$200+ a month. If you used a service that charged 2.75% per transaction, a parent paying you $150 a week would cost you $4.13 a week or $215 a year. With monthly fees charged by some companies the cost would be much more. All such fees are 100% tax deductible!
One provider said she didn't offer this service because she felt that it was a "bad thing to encourage young families to put normal, regular expenses on a credit card. It would be too easy for them to not pay the balance in full each month and they could end up buried in debt. Because I care about my families, I would not want to be part of that scenario."
Some child care providers pass on these fees to their parents. Many parents agree to pay for this convenience. Some providers told of parents who specifically asked if they could pay by credit card.
Your Decision
When considering whether or not to accept credit card payments, compare companies and fees. Talk to your local bank about whether they can set you up to accept credit cards. Be sure to understand all the fees involved (monthly fees, statement fees, transaction fees, etc.) before you go ahead.
Electronic Payment Option
Many more providers accept electronic payments from parents rather than accept credit cards. These banking services allow you to electronically transfer money from a parent's checking account to your bank account.
Tom Copeland - www.tomcopelandblog.com
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