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In my years as a freelance indexer, I’ve had many conversations with fellow contractors about this question. Should we accept credit cards? Is the convenience to the client worth paying the associated fees? And if we do accept credit card payments for our indexing and editorial work—how do we process the payments?

Resource | Public | Article | Scholarly Book Indexing | Comments: 0 | 27 November 2022 | Modified 9 May 2023

Should You Accept Credit Card Payments?

Most of my indexing clients pay by check or automatic deposit. This tends to be the norm in the United States, while in Europe checks are very rarely used. However, when I am asked by a client to use a credit card, I do accommodate their preference. Typically, I do so by sending them a PayPal link. I can accept credit card payments with my personal PayPal account by indicating to the client that they should select “goods and services” as the payment type. PayPal considers this a commercial transaction, and the current fee associated with this payment type is 2.99%.

Read on for details about how to collect credit card payments via a variety of services. I end this article by providing a cost/benefits analysis, so you can draw your own conclusions based on my experiences.

Credit Card payments: getting paid through PayPal and Venmo

PayPal is one payment gateway that freelancers can use to accept payments by credit card. Another payment gateway is Venmo, a service that’s owned by PayPal. Venmo has a similar setup to PayPal but works as a mobile payment gateway—as a phone app. Their current fee is 1.99% plus 10 cents per transaction.

The upside to using these services is that you can be paid instantly. However, one downside to asking clients to pay using either PayPal or Venmo is that the client must have an account with the payment gateway company. And some clients don’t want to set up an account for a one-off payment.

In fact, recently I received an email from an indexing client requesting to pay by credit card. The client wanted to pay same day because she had funds in her university budget that would expire by the end of the month. My first instinct was to ask if her department had a PayPal account. But going that route typically involves a couple of back-and-forth emails. So, I decided to go a different route to make things easier for my client. Keep reading…

Credit Card payments: getting paid through Stripe

In the case of that same-day credit card payment request, I decided to set up a Stripe account, something I had been putting off. I knew I wanted to use Stripe because of their pay-as-you-go fee structure: the service charges no monthly fees or set-up fees, and the cost is only slightly higher than PayPal (2.99% plus 30 cents per transaction). The advantage would be worth this slightly higher fee; my clients would not need to set up an account before paying me, saving time and emails for both of us.

Stripe is easy to ease, too. To my surprise, setting up my account took less than five minutes. I then sent an email to my client explaining that I do accept credit card payments. In my invoicing software, I converted my estimate to an invoice with the touch of a button. Then I checked the box to accept online payments and sent the invoice. (I use Paymo for invoicing. Look for a future post about it).

And wouldn’t you know it—ten minutes later I received the payment notification from Stripe and a thank you email from the client for “being so flexible.” This decision was a win-win.

Another benefit: Stripe also integrates with many invoicing softwares like Freshbooks, Wave Accounting, and QuickBooks.

Credit Card Fees: Cost vs. Benefit

Whether you use PayPal, Venmo, or Stripe, accepting credit card payments does mean paying 2-3% in fees. Is the speedy payment and flexibility worth it?

Although I did have to pay a credit card processing fee, the cost was worth it to me. Stripe cost just 30 cents more than PayPal, and the process was seamless for the client. My client indicated that they wanted to pay by credit card because it made it easy for them to submit the bill to their university and they wanted to do it immediately. Accommodating the client made me easy to work with, and getting this system set up for them sped up my payment.

Setup did involve some behind-the-scenes work for me, but now I’m all set to offer this option to other indexing clients in the future when I feel it’s appropriate. Currently, I prefer checks, but I have a line on my estimate that states, “Payments can be made by check. Credit card payments and direct transfers are accepted by special arrangement.” When I send an invoice, I need to manually check a box to accept online/credit card payments.

But could I make this a standard practice and always accept credit cards? How much would it cost me? Let’s break it down.

If someone invoices $100,000 per year and every single client pays by credit card, the annual cost at 2.99% would be $2,990. That’s just the percentage, however. Every transaction (invoice) also includes a nominal transaction fee. If the indexer sends out 70 invoices at $0.30 per transaction, transaction fees would total $21. Altogether, that’s a hefty amount: $3,011 per year lost to credit card processing fees. But would every client convert to credit card payments? I don’t think so. One of my large clients pays through automatic bank transfers, which requires no fees—and that client comprises twenty-five percent of my income.

Even if the fees were just over $2,000 per year, would I want to absorb that cost? Maybe. First of all, credit card fees are an income tax write-off in the United States. Second, accepting that credit card payment did streamline my accounting. The payment was directly posted on my invoice, and the money was directly deposited into my banking account by Stripe. That saved me time. Also, some clients don’t want to pay by check. And if a client wants to request an alternative form of bank transfer payment like PayPal or Venmo (or even the banking app Zelle), that may involve a couple of emails to set both sides up properly. If the client ends up paying via PayPal, the costs to me are just about the same as using Stripe to collect from a credit card, but more time-consuming.

Finally, if you’re weighing the pros and cons, remember—you can roll the credit card fees into your rates. Let’s say you charge $4.00 per page for a trade book index. Charge $4.12 per page to make up for the credit card fees. If only half your clients pay by credit card, then you will be making 12 cents more per page on the ones who don’t pay by credit card. And for 200-page book, the additional cost to the client would amount to only $24.00.

If you’re competing with other indexers for a job, a client might not balk at the minor additional costs if they like the way you present yourself. In fact, they might even choose you over someone else specifically because you state up front that you take credit card payments!

And the verdict is…

Yes, absolutely—do it! If any of you are thinking about taking credit cards in the future, what are you waiting for? Setting up to accept cards is not a hard process to implement… and if you use a payment gateway like Stripe, you won’t be charged unless you receive a payment. Accepting credit cards can lead to almost instantaneous payments, which is better for your cash flow, and you can write off the credit card fees as a business expense. You also look accommodating and flexible to clients, which may increase your odds of being chosen for a job. What do you have to lose?

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Michelle Guiliano | Line by Line Indexing

Indexer from Etna, New Hampshire | USA
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