Image from www.squareup.com

I need a bit more time with Credenza before I can give it a meaningful review. Until then, I wanted to share something with you. My personal attorney introduced me to a cool app that really helps him out (he’s a sole-practitioner). It’s called Square, and it’s available for Android, iPhone and iPad for free. It’s a credit card processing service that is so easy, a caveman small-firm can do it!

No sign-up fees, no monthly account fees, no annual fees, no early-termination fees, no contracts and no hidden costs. It’s as simple as 2.75% of the charged amount when swiping the card, or 3.5% + $0.15 if you enter the card number manually – that’s it. No, seriously, that’s it. You can use it as much or as little as you’d like. If you don’t want it anymore just delete your account, and the app, and then stop using it – no cancelation fees.

Obviously, I was skeptical when he told me about it – I mean, I know as well as anyone that when it comes to credit card processing, there is always a catch (some hidden clause that you consented to by pressing ‘0’ for the operator). Well, sure enough, it’s the real deal.

Download the app, create an account (either personal or business), add the bank account you want the money to go into (either personal or business), and then just do business. They even send you the credit card reader (the thing you swipe the card in) completely for free – shipped right to your home or business.

Wherever you are, so long as you have your phone with you, it’s as simple is plugging in the tiny reader directly to your phone (see picture), swiping the card, charging the amount, having the client use their finger or stylus to sign, and entering in the client’s email or phone number, at which point the system either emails or texts them a receipt for their purchase.

When my attorney used it to debit for the services I needed, he swiped my card once, entered the amount, I signed right on his phone, and then he processed the transaction. Within 30 seconds I got my receipt via text message – done deal. No glitches, no delays, no errors – nothing. Plus, my attorney told me that payments are processed into his account in three to five business days.

I look at it this way: you don’t want to pay 2.75% to a credit card processing service – I get it. But, when push comes to shove, isn’t collecting 97.25% of your receivables better than collecting 0%? So there you have it, credit card processing so easy…a small-firm can do it.

Maybe you know of other good alternatives – leave it here. Otherwise, just keep reading Legal Loudspeaker.

 

Showing 2 comments
  • Lawrence Brenner
    Reply

    This service sounds great but my one reservation is the fees coming out of a retainer that you might not have earned yet.

    • Michael O'Neill
      Reply

      Lawrence, thank you for your comment as I see the concern with using credit processing for receiving general retainers. I wanted to respond with a few scenarios to consider when utilizing credit processing services at a law firm.

      When accepting credit for a general retainer for services not yet performed, most credit card processers will fully credit the client a full refund, net of fees, within a specific time period. The time period for Square is 60 days, if within the 60 day period a full or partial refund is due to the client, the agreement reads that the agency will issue the refund on behalf of the firm. Knowing that most cases extend beyond a 60 day window, a refund due to the client beyond 60 days will be the responsibility of the law firm to process a refund via check or cash and any associated fees would be considered costs of doing business. Also, depending on what type of accounting method your firm or yourself utilize, revenue recognition differs. On a cash basis of accounting, revenue is recognized when cash is received therefore regardless of whatever services are performed that cash is, technically speaking, yours.

      On a personal level, with general retainer rules differing by each State and trust account activity being scrutinized by States I would be careful of using a processing agency for these transactions. Where law firms can benefit from a credit card processing agency is when trying to collect on the aged receivables extending beyond 30, 60, or even 90 days. It can help in relieving the office managers multiple roles as debt collector or manager of payment plans. My first recommendation would be to always receive payment in cash or check as the full payment amount is received and recognized. A credit card fee percentage can add up if every bill is processed through credit transactions. If you offer credit payment services for clients with aged receivables that are aged to uncollectable levels, a credit card payment net of fees is better than no payment.

      The greatest thing about the easy to use, no hidden cost, credit processing services is that it makes these services available to businesses that would have never considered them because of fees and equipments costs. It cuts down on businesses from constantly phoning clients to pay, or submitting debt to collection agencies which sometimes charge significant percentages for collections. It allows businesses in professional service environments to get creative with collections and collection agreements to help mitigate potential revenue loss.

      -Shawn, Accellis Technology Group

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