Payment processing is a completely new concept to most freelancers because they have either just started their business or they have been using the “old school” methods for so long, like a Word document invoice sent through snail mail.
I was once a freelance blogger so I know what it’s like to be in those shoes and have made some of my own mistakes when setting up payment processing to receive funds from clients.
In my business now, running an online invoice and payments business where I work directly with freelancers and small business owners, I have heard many stories about many other types of mistakes that can be made along the way before a person gets signed on for our solution.
Here are eight of the most common mistakes that freelancers have made when setting up their payment processing:
Going With the Cheapest Payment Processor
Selecting your payment processor based on cost versus features is a big mistake. While I could say that you get what you pay for, this doesn’t always hold true because I wouldn’t recommend you go with the most expensive payment processor or even one that lands somewhere in the middle. Instead, focus on what the processor offers and make sure it fits your needs.
Falling Victim to Those Nasty Hidden Fees
Unfortunately, the payment processing industry has developed a notorious reputation for hidden fees that make themselves visible when it’s too late and you have already signed on.
Payment processors often charge different rates based on the type of credit or debit card being used and how the transaction is processed (online vs. swipe). Read the small print (always) to make sure you are not going to be haunted by special fees related to chargebacks, withdrawals, refunds, batch processing, etc. Due is a reputable payments company that I use that has zero fees.
Getting Stuck With a Processor That Makes You Wait for Your Money
Time is definitely money, so the longer you wait for your funds to arrive, the less cash flow you have. Despite available technology that can speed fund delivery, some payment processors still drag their feet or jump to some reason for freezing your money. Look for a payment processor that can get you funds in one to two business day at the very latest.
Not Piling on the Fraud Protection
Many freelancers may not realize that some people simply may come to them simply to see if they can defraud you. As a newbie to payment processing, they may sense an easy target and may try to pay you with money stolen from someone else’s card or try to hack your system to get the personal and financial data of your clients and even information about you and your business. Look for a payment processing company that offers maximum fraud protection.
Taking Responsibility for Data Security
You are a little business that is now making yourself vulnerable to huge costs and maybe even legal action by taking responsibility for data security. Look at where the payment processor stores data and how they do it. Make sure that every piece of information is used securely.
For example, whichever system you use must employ the use of encryption. Take seriously the admonition to make sure what security measures are being used with your information.
Ignoring Support and Setup Assistance
Take the time to use the support and assistance that is offered from the payment processing company. Don’t assume that you can just “wing it” on the set-up process or think that you are asking a dumb question that the tech support staff will snigger at on the other end of the line or screen.
Go with a payment processing company that offers multiple support contacts, including those that work on the weekends when you are most likely taking care of things like invoicing and payment acceptance.
Sticking With Just One or Two Payment Options
If you are only offering one or two ways for people to pay you when you invoice them, you are instantly limiting your potential customer base. Instead, consider that it may be a good idea to choose a payment processor that gives you more payment options so you can reach out to those customers who may want to use their credit cards to finance the product or service transaction.
Even better, if you give customers options like the ability to pay with Bitcoins or another type of cryptocurrency, funds from their digital wallet, or an eCheck, they are more likely to choose you over your competitor.
Integrating It With Your Website and Other Applications Is Next to Impossible
Some payment gateways take time to set-up, but even worse, you get it all set up and then you realize this website doesn’t integrate into your website or play well with the other applications you use.
Look for a payment processing option that integrates with your website and lets you use the applications you prefer plus offers mobile capability so you can bill and receive money by phone wherever you are freelancing in the world.
It’s also good to consider a processor that is developer-friendly with clear APIs that can provide ways to add more features and that will integrate with numerous other third-party solutions you are already using, or plan on using.
Now that you see these payment processing mistakes made by freelancers and other small business owners, you will be more than likely not to repeat them when you set up your own payment system.