Getting paid via the Intuit Payment Network has been a real boon for the VAs at AssistU. With a fee of just $.50 per transaction, it beat using PayPal—hands down—with clients who wanted to pay from a checking account.
But Intuit announced last week that they are shuttering IPN at the end of June, leaving lots of people wondering what the smart choice will be for accepting client payments moving forward. In case you didn’t receive the email, here’s a FAQ about the changes that are coming our way, whether we like it or not.
Clearly, the big deal here for many people is that IPN was so easy to use—far easier than PayPal. Added to that is, of course, the desire to keep as much revenue as possible. Again, IPN made that far easier than PayPal, who charges (on average) 2.7% + $.30 per transaction. When you see that amount taken out of payment from a client, it can feel a more than a bit disheartening.
Right now, it doesn’t seem as though there’s a single easy alternative to IPN. That was, in fact, the brilliance of IPN–that it was simple, and worked for everyone, regardless of a person’s bank. Now, everyone could go back to accepting paper checks, but…who wants to do that? ;)
Raymonda wrote to ask me what I would do, and more specifically if I would have clients pay via PayPal, but charge them a surcharge for paying by credit card. Interestingly, I’m in the same boat in my coaching practice as you are in your VA practices; about 80% of my clients have paid me via IPN. And I’ve already decided that I’ll have everyone pay me via PayPal, and I’ll eat the fees.
It’s important to know that it’s a violation of PayPal’s TOS to surcharge a customer. I don’t recommend you even consider that.
But what you might consider is raising your fees to cover the expenses.
What you’d want to do is pad your hourly rate by enough to cover your added expense, and announce to your clients that, effective July 1, your new fee will be $X. How much you’d need to raise your fee depends, of course, on what your fee is, but if we go with an average $50/hour, to cover the fee PayPal will charge, you’d need to raise that to $51.65 to cover the fees. I would suggest $52 for its roundness :)
If you have a package price, or a flat rate, or a retainer that doesn’t incur overages, you can also figure out the fees on the whole amount, and then pad by that (it saves you fees this way–$.30 per hour X the number of hours in your retainer is more expensive than one $.30 fee on the entire retainer/package/flat rate amount of the transaction.
I also wouldn’t frame this for clients that you’re raising your fees to specifically cover these costs. You could say that the raise in your fees is a due to higher expenses involved in running a leanly-profitable business. It’s true, and doesn’t scream, “I don’t want to have to pay for your paying me, so YOU do it!”
You can also explore having clients pay you via ACH, which is free for the client to send, and should be free for you to receive, but then money’s coming to you from a variety of different banks, there’s more to keep track of, and the complexity will cost you more in time. For that last reason, you might find that having PayPal making things run smoothly feels smarter and simpler to you, and well worth the money in fees.
There are some payer systems you’ll find if you do a search for services that appear to be like IPN. Before choosing one, please be sure that the TOS doesn’t prevent you from accepting business payments. Whatever you do, don’t try to sidestep that requirement as it can land you in a tub of hot water (setting an account creates a binding legal agreement with the service provider, and if you use the service for something they forbid, you violate the agreement with them, which is never a smart idea).
Now, because the VMoxie community is vast, and I know you all have your ears open and listening to information from any number of places, if you happen to find a viable alternative to IPN, I hope you’ll share it via a comment so we can all benefit from your sleuthing skills and genius. ♥
And one more thing before I go. While the end of IPN is unfortunate, there’s an opportunity here for growth. That growth is in being grateful for what you had, accepting the change with grace—even when it doesn’t make you happy, deciding quickly what you’ll do about it or instead of it, and then getting back to doing your work and living your life without the thing hanging over your head. Don’t let it take you the next three months to take action. Instead, resolve to make a choice, have your clients clued in, and have your processes all updated by the end of April, at the very latest. When June ends and IPN is gone, you’ll be glad you did.