Should you allow clients to pay by credit card?

I often say that the worst reason to turn down a translation job is because you can’t figure out how to take the client’s money. However clients want to pay you, you want to make it happen. In 16 years of freelancing, I think I’ve probably been paid in nearly every imaginable way, including cash (from an official document client who came to my office and paid in person).

An alternative to paper checks

Like many translators, I’m trying to migrate my clients away from paper checks and toward electronic payments. This is more complicated than it might sound, because the US banking system has been very slow to adapt to electronic payments in a way that is a) free, and b) easy to set up. ACH (“direct deposit”) transfers are usually free, but the client has to set you up in their online banking system, which can be time-consuming. Emerging methods such as Chase QuickPay are simpler, but people seem slow to adopt them, and the fee structure is not always transparent. Additionally and even more frustratingly, these proprietary electronic payment systems often have oddities that you would not anticipate–for example that you are limited to transfers of a certain amount if the recipient uses a different bank than you do, or that you have to call on the phone and verbally approve transfers over a certain amount, to someone you’ve never paid before (I’ve experienced both of those with Chase QuickPay). Hence, checks still rule the American banking and payment system.

PayPal: better or worse?

I’ve long maintained that PayPal is not the worst way to take payments from individuals. I use it with all of my individual clients (probably at least 100 transactions per year), and for all of my online course registrations. All told, I processed nearly $50,000 through my PayPal account last year, with a correspondingly large fee taken out: about $1,500, since PayPal charges a commission of about 3.5% on each transaction (more for international credit cards, less if the person uses their own PayPal balance to fund the transfer, and so on: see reference above to “non-transparent fee structures”).

I’ve also observed that, for whatever reason–paging a behavioral economist here–people tend to pay electronic invoices much faster than they pay an invoice that they’re going to write a check for. Something about that tantalizing link or “pay now” button just gets the payment juices flowing.

First, try direct deposit

Before you go the credit card route, try this: ask all of your regular clients if they’d be willing to set you up in their direct deposit system. Surely they are not still mailing paper paychecks to their own employees, so if they’re paying you with any regularity, try that first.

Next, look at PayPal.me

In 2018, PayPal introduced a novel service called PayPal.me. That’s not an affiliate link, and here’s a post about PayPal.me from the money transfer service Transferwise which covers most of the bases. PayPal.me allows you to create a one-click link that’s pre-set to the amount the client owes. If you want to see how it works, here’s a link I’d send out to someone who owes me $100. Click-pay-done; the client enters no information besides their own credit card details, and you’re set.

The primary reason not to accept credit cards is the fee, but there are a lot of upsides:

• Instant gratification: if you sell on-demand products or services, people can purchase them right there
• No more dealing with paper checks and their various hassles
• The ability to pressure late-paying clients (“Let’s just take care of it right now; could you put it on a card?”)
• The ability to enforce cancellation deadlines by charging the client in advance. If you provide services that require a certain amount of notice to cancel (i.e. language teaching, conference interpreting, online training), this could be really helpful. Rather than trying to enforce your cancellation policy, just charge the client’s credit card at the time of the cancellation deadline.
• It’s incredibly easy for the client. Click here. That’s it. I find that my law firm clients (who are perpetually short on time) are particularly receptive to this.

Here’s what I’ve been experimenting with

• I still send a PDF invoice for every translation, so that the client has that if they want it. The invoice contains instructions for paying by check or wire transfer.
• In my e-mail to the client, I also say, “If you’d like a one-click payment option, here’s a link that’s pre-set to the correct amount.”
• A surprising number of clients take this option, meaning that I pay a commission, but get my money right away, sometimes the same day I issue the invoice.

At this point in my freelance business, I’m ready to chalk this up to “the cost of doing business.” At the outset of my business, when a 3.5% hit on a large payment would have made more of a dent in my finances, I probably wouldn’t have done that. One thing I would not recommend is explicitly telling the client that they have to pay the credit card fee: it’s really not their problem, and I think it looks kind of penny-pinching. Most of my direct clients want me to make translation easy and painless for them, and while they’re looking for value for money, they’re not necessarily focused on “cheap.” So if I raise my rate a tiny bit to cover this fee (usually embedded in a per-project price), it’s OK. When I worked primarily with agencies, that would not have been true.

Readers, do you have thoughts on what payment methods you’re currently accepting?