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What Payment Forms Do You Accept?
Posted: Mon Nov 15, 2010 4:20 pm
by Jonah Bron
Hello, world!
I'm beginning to get a few clients, and would like to know what forms of payment the freelancers here accept from clients, and their reasons? Thanks
Re: What Payment Forms Do You Accept?
Posted: Wed Dec 08, 2010 8:04 pm
by designjutsu
We only use Paypal since most of our clients are on the other side of the world. I don't have to worry about security because that's why they're so popular.
I really appreciate if anyone can suggest other payment methods

Re: What Payment Forms Do You Accept?
Posted: Wed Dec 08, 2010 11:27 pm
by Benjamin
Checks. Rarely Alertpay. Never, ever PayPal.
Re: What Payment Forms Do You Accept?
Posted: Thu Dec 09, 2010 3:05 am
by designjutsu
Benjamin wrote:Checks. Rarely Alertpay. Never, ever PayPal.
Thanks for the info. I'll try Alertpay. Why hate paypal? because of the charges?
Re: What Payment Forms Do You Accept?
Posted: Thu Dec 09, 2010 4:17 am
by Benjamin
The three main reasons I won't accept PayPal are:
1. It's very easy to charge back funds.
2. They consistently put holds on many accounts for reasons I don't know. If they do it to you plan on waiting 6 months or more to receive your funds (if ever) or hire a law firm. I don't mean a lawyer, I literally mean a law firm.
3. Fees. Alertpay fees are pretty high as well. Over the course of a year you are giving away 3%+ of your gross income. That can add up to lot of beer money or free labor you are giving away.
I think people don't realize how much money leaks out paying all sorts of various fees. Let's say you make $100k per year, accept PayPal and live in the U.S.
$3,000 Goes to PayPal leaving $97k
$24,250 Goes to Federal, State, SS and Medicare taxes. (25%ish) Leaving $72,750
$4,365 Goes to Sales tax for items you buy. (6%ish) Leaving $68,385
$5,000 Goes to Interest on Credit cards (Rough Average) Leaving $64,785
Your $100k salary is already down to $64k before you have even spent any of it. So yeah, I'll take checks thank you. I don't use credit cards either. Believe it or not, when you have no credit card payments and aren't spending obscene amounts on interest each month it's pretty easy to save for stuff and pay cash.
Re: What Payment Forms Do You Accept?
Posted: Thu Dec 09, 2010 5:11 am
by Darhazer
Our preferred payment processor was 2Checkout
Re: What Payment Forms Do You Accept?
Posted: Thu Dec 09, 2010 5:16 am
by designjutsu
WOW THANKS!!! I really learned a lot from that. Really informative!
Yes you're right about the paypal drawbacks and I'm also worrying about it a little (I just haven't experienced anything bad from them but I'm not planning to

)
I'll try 2checkout. Thanks a lot!!

Re: What Payment Forms Do You Accept?
Posted: Sat Dec 11, 2010 8:17 pm
by Jonah Bron
Wow, that's some interesting data. Yeah, there's no way I'm giving 3% to Paypal. Well, until now I've been just accepting checks... I suppose I'll keep it that way

Re: What Payment Forms Do You Accept?
Posted: Fri Dec 17, 2010 7:33 am
by Apollo
Although you have to be careful when using PayPal, they still are one of the biggest online payment processors worldwide, and considered a "standard" by many potential customers.
I don't fully agree with these arguments:
Benjamin wrote:$3,000 Goes to PayPal leaving $97k
True, but can you name some serious alternatives that charge significantly less?
$24,250 Goes to Federal, State, SS and Medicare taxes. (25%ish) Leaving $72,750
Not related to PayPal (not saying you implied so, but just to keep things in perspective), this comes with any form of income.
$4,365 Goes to Sales tax for items you buy. (6%ish) Leaving $68,385
This contradict with "before you have even spent any of it"
$5,000 Goes to Interest on Credit cards (Rough Average) Leaving $64,785
Also contradict with "before you have even spent any of it" and besides, 5% credit card interest seems REALLY huge to me!
Here in Europe, we really don't get why Americans are so fond of checks. Seems bureaucratic, expensive (of all payment methods, the bank rates for cashing checks are the highest by far), snailmail / manual work involved, lots of paperwork, slow, etc.
I really prefer online banking, everybody is used to that and a wire transfer is done within seconds. And several internet payment protocols exist for this, allowing customers to pay with their own bank's familiar, trusted interface. Risk of chargebacks is pretty much nonexistent.
Obviously one needs to accept normal credit card payments as well. A disadvantage of PayPal is that customers need a PayPal account themselves, otherwise its credit card processing is very limited (e.g. they allow only 1 or 2 credit card payments per card from non-members).
Re: What Payment Forms Do You Accept?
Posted: Fri Dec 17, 2010 8:08 am
by superdezign
PayPal has tried to make themselves seem like the best method for accepting payments, but they only serve as a middle-man between you and your client's credit card or bank account. I only use PayPal if I'm dealing with a client that has already transferred money from their bank account to PayPal in order to avoid fees. Otherwise, I take checks.
Re: What Payment Forms Do You Accept?
Posted: Fri Dec 17, 2010 1:49 pm
by Benjamin
Apollo wrote:Although you have to be careful when using PayPal, they still are one of the biggest online payment processors worldwide, and considered a "standard" by many potential customers.
I don't fully agree with these arguments:
Benjamin wrote:$3,000 Goes to PayPal leaving $97k
True, but can you name some serious alternatives that charge significantly less?
1. Check
2. Bank Wire/ACH Transfer
3. Cash
I see the rest of your arguments. It's the concept of *leakage* that forms the basis of my argument. Of course the exact numbers vary person to person. I think you would be very surprised at the amount of Interest people pay each year, especially in the US. Considering that most Americans spend their money before they have it (credit), I don't think I'm that far off by including sales taxes in the numbers.
Here are some statistics:
http://www.creditcards.com/credit-card- ... s-1276.php
It states the average credit card debt here is around $15k. Programmers are typically in a higher income bracket so I don't think it would be innacurate to assume their average credit card debit is higher. Going with the $15k figure though, and assuming most people pay around 16% interest on that, that alone is $2,400 a year. Most store credit cards are around 22% though. This includes stores such as Lowes, Victoria Secret, Sears, JC Penny etc.
If you also have a mortgage less than 5 years old, it's also likely you are paying $500 or more in interest each month since the interest is paid first. This adds another $6,000 per year. It's easy to save a significant amount just by making two payments each month on your home. I'm not saying pay *more* each month. What I mean is if your house payment is $700 a month you can save tens of thousands of dollars in interest over the life of the loan by simply making a $350 payment every two weeks rather than a single $700 payment each month.
So with the credit cards and mortgage you're already up to $8,400 a year in interest.
Anyway, that is a bit off topic but it's another example of how to save yourself some money just by managing your money a little bit differently.
EDIT: For the most part, checks are completely free here.