Credit Card Processing for Contractors

Credit Card Processing for Contractors: Industry Guide

The market is evolving and contractors need highly efficient credit card processing solutions. It is the need of the hour for contractors to have access to flexible payment processing accounts to support their demanding business operations. A good contractor merchant account helps attract and retain customers. QuadraPay has been providing merchant services for contractors powered by finest acquiring institutions since 2016. Our contractor credit card processing experts have written this guide. In this extensive guide we have discussed the best credit card processing solutions for contractors. Whether you are a general contractor or a remote contractor this guide will help you select the right payment service provider. Let’s begin.

What is Credit Card Processing for Contractors?

Credit card processing for contractors refers to a payment system that allows contractors to accept card payments from clients. It enhances cash flow and boosts customer satisfaction. Most companies prefer making payments to contractors using their corporate credit cards and that is why it is essential for contractors to have an efficient merchant account.
Types of Contractor Credit Card Processing Solutions

Retail Credit Card Terminals for Contractors

With retail credit card terminals, contractors can accept payments through swipe, chip, or tap methods. For on the go payments contractors can use mobile credit card readers. These compact devices are easy to carry and can be used onsite and at customers premises to collect payments. By using modern credit card terminals contractors project a professional image. It helps in avoiding delays in payments and may also increase the overall sales because of flexible payment options.

Online Credit Card Processing for Contractors

Contractors that have an e-commerce website can use an online credit card processing solution. This allows contractors to collect payments remotely without the need to tap or swipe the card on the retail terminal. Clients can either make payments on contractors’ websites or via invoice links. With online credit card processing mode, contractors can accept recurring payments as well. This is especially beneficial for large orders where customers may wish to make smaller payments each month. An online payment gateway can be quite viable for service agreements and remote projects.

Common Challenges Contractors Face in Payment Processing

Sometimes, contractors face serious challenges when it comes to getting the approval of a merchant account. These challenges can have a significant impact on the cash flow, clients’ trust, and overall business operations. Let us explore some of the most common obstacles that contractors face when they apply for a merchant account.

High-Risk Classification by Some Processors

Many traditional low-risk payment service providers consider contractors to be high-risk merchants. The classification is generally due to the high ticket size, inconsistent billing cycle, and mobile nature of the business. As a result of these factors, contractors are sometimes asked to accept high processing fees, strict underwriting and delayed settlements. In such a scenario, merchants should work with specialized high risk processing companies that have experience of working with contractors.

Chargebacks and Fraud Risks

Contractors offer services to clients at different locations. Transactions can be large and this can create big credit risk for payment processors. Customers sometimes dispute the transaction and ask for money back. This can be because of reasons such as a client misunderstanding the scope of work, project modification, or absence of formal signed contract. Apart from chargebacks, fraud is also a serious concern in this industry, especially for those contractors that accept card-not-present transactions.

Choosing the Best Contractor Merchant Services

When searching for the best contractor merchant services, you must evaluate the providers based on the following factors.

Customization Options: You will be able to accept card payments by choosing any processor however you should prioritize working with a company that has experience of offering contractor merchant services. A specialized and experienced provider will be able to handle industry specific requirements like job tracking and invoicing integrations.

Low Transaction Fees: You should work with a processor that is affordable and does not compromise the quality of services. If your transaction volume is high, then you can potentially get good rates.

Customer Support: Contractors may need support from the payment processor anytime. It is vital for you to work with a processor that offers support when you need it. Look for a provider with 24/7 support commitment.

How to Apply for a Contractor Merchant Account

It will help you if you understand the steps involved in applying and getting approved for a contractor merchant account. You will be prepared to face and overcome various challenges.

The first step is to be prepared for the application. For a contractor merchant account, you will have to approach a payment service provider that onboards merchants from your industry. You should identify at least five payment service providers to choose the best and most affordable option.

Once you have identified the payment service provider it is the time for you to send the KYC documents. These will include your business registration documents, personal identification, and any special licence that your contractor business must have.

You will send the KYC documents with the application form to the payment service provider, and then they will start the review. The underwriters at the payment service provider company will check your documents and your business model, and based on their understanding, they will either approve or decline your merchant account application.

The total time required for the approval of a contractor merchant account is generally less than a week’s time. After the approval you can do the payment gateway integration and then you will be able to accept life credit card transactions.

Future Trends in Contractor Payment Solutions

The industry is going through a massive transformation. Contractors are now using new-age technology to deliver services, and this will require the support of robust payment solutions. In the coming years, we will see a massive increase in demand for contactless payments. Tap-to-pay and wallets like Google Pay will become normal. This will result in faster onsite transactions and negligible reliance on paper invoices. Remote contractors will be using alternative modes like virtual terminals and invoice link payments. Contractors will use artificial intelligence to send reminders to customers for recurring payments. Overall, it looks like the future of this industry is exceptionally bright.

Conclusion: Credit Card Processing for Contractors

Choosing the right contractor payment processing is important because it helps in efficiently running your businesses operation. By offering multiple payment options, using on the go payment processing, and integrating with POS systems and accounting tools, you can significantly boost your contractor business reputation and sales. A good payment processor for contractors must be affordable and efficient. If you have any questions about credit card processing and merchant services for contractors, then email us at [email protected], or you can fill out the online merchant account application form.