Fact Versus Fiction: The Truth About How Online Payment Methods Affect Your Firm for the Better
Today we are talking about online payments.
The truth is, offering to accept online payments just makes it easier for you to get paid. It eases the billing process for both you and your clients.
However, you might have some arguments against transitioning to online payments. We’re going to cover some of the most common of those arguments (which are based on myths), put those myths up against the facts, and discuss how online payments can affect your business.
Spoiler alert: you’ll get your money faster!
Myth 1: Online Payments Are Going to Cost You More
Oftentimes, online payments come with a processing or transaction fee. Law firm owners usually look first and foremost at that cost and perceive it to be unnecessary.
However, we need to look at what the cost really is. The cost isn’t just the processing fee; it’s also the time you spend processing checks, sending out paper bills, and waiting for your money.
We do need to be aware of our expenses and use our resources wisely but studies have shown that firms collecting online payments collected $10,000 more per lawyer in 2019. They were also projected to collect $15,000 per lawyer more in 2020. That’s a significant sum of money.
Time and angst lead to procrastination. That can all be avoided with online payments. Add up the numbers for the money and time spent on paper billing and doing online payments becomes a no-brainer.
Another study showed that law firm owners get paid 39% faster by allowing credit card payments. How much would that time cost you? It would likely cost you a lot. This means that online payments will not cost you more money but will actually save you loads of it.
Raise Your Fees
If you’re still worried about the additional cost of that credit card processing fee, consider increasing your rates by the same percentage as the fee. That way, you won’t have to think of the processing fee as an additional fee. You can pay it without that money coming out of your profits or expenses.
New clients won’t know the difference since 2%-5% is not a huge amount. Many current clients will also find it very reasonable (just make sure that your engagement letter says something about rates possibly going up and, if it doesn’t, change it). Repeat clients will find this reasonable too; they know prices going up is the cost of business. Many clients won’t even notice this raise in rates at all.
Myth 2: Your Clientele Prefers to Pay With Checks
Many attorneys will argue that their type of clientele prefers to pay with checks. While it’s true that some clients do, a 2018 study found that 75% of consumers in the US prefer to pay with a credit or debit card. This means that most of your clients will fall in that 75% of consumers.
Even older clientele are paying for things online (i.e. Netflix and other online subscriptions). They also likely have people helping them pay their online bills.
We get stuck in these ideas of what our clients want without ever actually asking them or exploring it with them. Just try bringing it up with your clients and beginning that conversation. You may be surprised what your clients prefer.
If you want to learn more about credit cards and other online payment methods, check out Episode 019: The Facts about Online Payment Methods.