If there is one thing for certain, it’s that e-commerce is growing by the minute. Your interior design business should be keeping up with the times, accepting and enabling digital payments. One major benefit to facilitating these consumer friendly payment methods is the time saved not pursuing clients for payment or dealing with bad checks. They also allow you to keep your own outlay of money low which is especially important in times when cash preservation is important. 

Recently, we wrote about Design Manager’s exciting new partnership with virtual payment facilitator Stripe, and how it is so timely given the growing role of online transactions in the interior design world. Here, in Part Two of our series on the growing importance of all things digital, we’re going to take a step back and cover what credit cards and Automatic Clearing House (ACH) payments can do to legitimize your interior design business, grow revenue, and make sure your business stays relevant as we enter a new standard of doing business.

Back to Basics: What are Credit Card Payments?

Credit cards have become so ubiquitous in our culture, it’s hard to remember a time when most adults didn’t carry at least one or two with them at all times. A credit card is a piece of plastic that represents a person’s buying power. Think of it as a loan. A credit card company allows the user to make a purchase using the credit card company’s funds, and that company charges the card holder a small fee for the convenience, particularly if the card holder is unable to pay their monthly bill in full. 

Credit cards certainly carry risks, but they also offer perks to their customers, allowing them to accrue points or earn cash back on major purchases. For these reasons, credit cards have grown in popularity over the years. In fact, according to research by BAI Research and Hitachi Consulting on Consumer Payment Preferences, 41 percent of shoppers have cut down on their use of cash, while 97 percent of respondents said they are turning to credit and debit payments instead. 

The Pros and Cons of Credit Card Payments 

There are a lot of benefits to businesses for accepting credit card payments. However, there are downsides that may outweigh those benefits - let’s dive deeper. 

Pros:

• Appear trustworthy  Businesses that accept credit card payments can appear more legitimate to consumers. 
• Faster transactions  Businesses typically receive funds from credit card transactions within 2-3 days. 
• Financing option  Allow clients to purchase services and goods they don’t necessarily have the immediate funds to afford. 

Cons:

• Cancelled transactions  A client can dispute a charge with a credit card company, which businesses have to protect against by keeping a diligent paper trail.
• Increased Fraud  The possibilities of fraud and data breaches are higher with credit card transactions, leaving both you and your clients vulnerable.
• Higher cost of doing business Credit card companies charge merchants processing fees. Design Manager will soon offer a means to pass through the fees directly to your clients; however, whether or not your competitors do so may put pressure on you to absorb these costs.
• Going down with the ship  Interior designers ideally want to invest in clients that can grow with them and bring in additional projects over time. Clients relying on credit are at greater risk of decreasing their budgets over time.

What Are Automated Clearing House (ACH) Payments?

The next innovation in virtual payment comes from Automated Clearing House (ACH). The best part of ACH is that it cuts out the middle man entirely. It functions just like a bank transfer, where money moves directly from the outgoing bank account to the recipient's bank account. Transfers on the Automated Clearing House (ACH) network enable customers to send funds from their bank account to a US-domiciled bank account. In 2019, the ACH network moved 24.7 billion electronic payments, making it one of the largest, safest, and most reliable payment systems. 

Collecting payment via ACH credit transfer is done in a few simple steps with Design Manager’s Stripe integration. Send your client an email with a payment link, which will include a drop down to choose Bank Transfer. Clients then enter their bank information and click Pay to finish the process. Within two days, the funds will be moved from their bank account to yours. 

10 Reasons Why ACH Payments Are the Best for Interior Designers

There is a long list of reasons why ACH payments are the best method for both you and your clients. They include:

1. Lower costs  1.2% vs an average of 3.1% for credit cards.
2. More reliable  Payment is most likely to go through compared to checks or credit cards.
3. Less risk assessment  The bank where the funds are coming from has already verified the deposits, equaling faster transactions with less administrative burden.
4. Convenient  ACH payments can be set up and verified with just the client’s bank account username and password using DM’s advanced verification technology.
5. Safe  ACH allows you to limit the number of people exposed to your bank account information, versus a check, and transactions are protected under federal law.
6. Promotes decisiveness  While a client can dispute a credit card transaction, ACH payments can only be reversed for one of three reasons: the transaction was not for the exact amount authorized, it was processed earlier than authorized, or it was not authorized at all.
7. Stability  Because the funds transferred are drawn from bank deposits instead of credit, you know that your client has the cash to afford your services and products in the present tense. Plus it protects against check fraud.
8. Efficient and Eco-friendly Transactions are paperless and automatically recorded, leaving less room for human error and far less personnel time needed to facilitate and record for bookkeeping.
9. Greater control over finances  The real-time nature of ACH helps you understand your business’s current financial status, while the delays, administrative process, and human-error created by check processing, and the less reliable nature of credit card transactions, makes accounting more complicated and to function on a lag. 
10. Increased Client Satisfaction Offering different payment choices to your clients shows that you have their best interest in mind and builds trust and credibility right from the beginning.

Bottom line: ACH transactions make it more likely that a business will be paid. 

How To Start Taking Online Payments with Design Manager 

Clearly there are a lot of reasons that accepting credit card and ACH payments is important for any small business. The good news for interior designers who want to set up or improve a credit card and ACH payment system is that Design Manager makes it simple. 

Here’s how you do it: 

• Once logged into your Account Management Portal, click “Menu” in the upper right hand corner.
• Then, select “Connect Stripe”.

As the months pass, there is little doubt that virtual payments will continue to gain market share over traditional cash and check payments, affecting even the interior design business, which has long been a check driven business. For design businesses looking to adapt with the times, now is the right time to develop a strategy for accepting virtual payments, and luckily Design Manager has made it easy for you to jump right in! Stay tuned for all the latest on interior design industry news and business advice space. 

Watch a demonstration of DM Online Payments