Should you take card payments, and what it really costs you

You finish the job, test it, tidy up, and the customer says “Can I pay by card?” If the answer is “Sorry, cash or bank transfer only”, you have just turned a paid job into an invoice you might be chasing for a month. So should you take card payments? Yes. The better question is what it really costs you, and how to make sure that cost comes out of the customer’s price rather than your wage.

Should you take card payments as an electrician?

I learned the hard way what not getting paid does to a business. In October 2007 two developers went under owing me over £40,000, and my company went with them. That is a big part of why I tell electricians to work for homeowners and get paid on completion. Money in your account before your van leaves the drive is worth more than any invoice, however polite the customer is.

Card payments make that easy. Most people do not carry cash any more, plenty will not have your bank details to hand, and “I’ll pay it tonight” turns into next week more often than any of us would like. A card reader in the van means the job and the payment finish at the same time.

It also says something about you. The customer’s worry is being ripped off by a cowboy. The cowboy wants cash. The proper business takes cards, gives a receipt and puts it all through the books. That is not why you take cards, but it does not hurt.

What card payments really cost you

At the time of writing, the big pay-as-you-go readers (SumUp, Square, Zettle and the like) charge somewhere around 1.7% on a card tapped in person, with no monthly fee, and the reader itself costs £20 to £30 once. Payment links and card details typed in by hand usually cost more, often around 2.5%. Check the current rates yourself, because they change.

Say a consumer unit change comes to £1,200, as a rough example to show the sum rather than a price to copy: paid by card at 1.7%, it costs you about £20 in fees. If you put around £6,000 a month through the reader, that is roughly £100 a month in fees.

Now set that against the other side. One unpaid £1,200 invoice, chased for six weeks, costs you phone calls, letters, evenings and probably a bit of sleep. Lose one of those a year and you have paid for a year of card fees several times over. The fee is not the expensive part. Not being paid is.

The costs people forget about

The percentage is only part of it. Before you pick a provider, know about these.

• Contracts and rented terminals. Some bank and merchant deals look cheaper per transaction but lock you into a monthly rental for years. For most domestic electricians, a reader you own with no contract is the safer choice until your card takings are high enough to make a monthly plan worth doing the sums on.
• Keyed and remote payments. Taking card details over the phone costs more and carries more risk of a disputed payment. Tap or insert in person wherever you can.
• Chargebacks. A customer can dispute a card payment with their bank. It is rare on a job done properly, but it is why you want a written quote, photos of the finished work and a signed-off certificate. Paperwork wins disputes.
• Payout time. The money usually lands in your account a day or two later, not the second you tap. Know which day it arrives so it does not catch you out paying the wholesaler.

You cannot add a card fee, so build it into your price

Since January 2018 UK businesses have not been allowed to add a surcharge for a customer paying with a consumer debit or credit card. So “plus 2% if you pay by card” is out. The cost has to be in your price from the start.

That is easier than it sounds. Card fees are an overhead, like your van insurance and your phone. Put a monthly figure for them into your costs when you work out your prices, and they are covered on every job without you thinking about it again.

On an £85 minimum charge, used here purely as a rough example and not a figure to copy, 1.7% is about £1.45. Nobody should be losing sleep over that, but it belongs in your numbers rather than being quietly taken out of your profit. The free Minimum Charge Calculator lets you put your real overheads in and see what your minimum charge needs to be. Most electricians who run it find the answer is higher than what they are charging now, and it keeps creeping up as costs do.

And whatever you do, do not offer money off for cash. It is a discount, it trains customers to haggle, and it tells them exactly the wrong thing about how you run your business. Your price is your price, however they pay it. If you want to give them something extra, give them a better job, a tidy finish or a reminder when their next test is due. See what to say when a customer says another electrician is cheaper for more on holding your price.

How to set it up so you get paid on the day

The reader is the easy bit. The habit is what gets you paid.

• Say it at the quote. “Payment is on completion, card or bank transfer.” Put that line on every written quote, so it is agreed before you start, not sprung on anyone at the end.
• Take payment before the tools go back in the van. Walk them through the finished work, hand over the certificate, and have the reader in your hand while they are pleased with it.
• Deposits for bigger jobs. On a rewire or a job with a lot of materials, take a deposit when they book. A payment link costs a bit more, but a paid deposit secures the date and the kit, and customers who pay a deposit very rarely cancel.
• Keep bank transfer as an option. It costs you nothing, and some customers prefer it. Just ask them to do it while you are packing up, not “later”.

If you are not sure how your prices are built in the first place, start with how to price electrical jobs, then come back and add card fees to your overheads.

So, is it worth it?

For a domestic electrician getting paid on completion, taking card payments is one of the cheapest things you will ever do to protect your cash flow. The fee is a small, predictable overhead. Chasing money is a big, unpredictable one. Price it in, never take it off, and get paid before you leave.

Getting paid properly is one of the systems we work on inside My Electricians ToolBox, alongside pricing, getting better customers and keeping them. Membership is £127, and it is currently £97 a month if you want a look.

So be honest with yourself: how much are you owed right now, and how much of it would be in your account already if you had taken a card on the day?