Newest Covid-19 Contagion: Credit Cards

The pandemic of 2020-21 (note to self: we should trademark that) had some interesting impacts on the tree care industry. One of those was to help usher some old-line companies into the 20th century, as they began accepting credit-card payments.

For the company that doesn’t take credit at all, there are a number of benefits for changing their approach: cash flow, convenience, reduced overhead, great efficiency and opportunities to win jobs. TCIA staff photo. Credit-card image courtesy of Tree Top Payments.

Much of the industry has been taking credit-card payments for years, but the year of get-away-from-me helped push some green-industry holdouts into the world of 12-digit numbers and security codes.

“It’s really surprising,” says Sean McCormick, CEO and co-founder of SingleOps, a five-year TCIA corporate member company based in Atlanta, Georgia, whose operations-management system offers credit-card processing among its features. “You talk to folks and they’re like, ‘Oh, my customers prefer to mail me a check,’ and it’s like, ‘No, they don’t.’ The tide is slowly turning, and COVID-19 has been a real big accelerator of that.”

The pandemic has had some interesting impacts on arborists, as consumers stuck at home with extra money, in many cases because they took no vacation, looked outside their window and thought, “That old tree needs to go.”

There are many ways customers use credit cards via software packages including paying for services online, responding to emails with credit-card links or putting credit cards into a system for regular services such as a PHC program or a payment plan. Image courtesy of ServicePro.

The pandemic period featured a brief period of inertia at the beginning of the season, followed by a strong business year with non-field employees working remotely. It pushed many to revisit their business practices, update some equipment and rely more on software and technology – including technology that maintains minimal contact with clients.

“In general, we’ve seen SingleOps grow more than 100% annually, just in terms of our number of customers. But the credit-card piece itself has grown almost 200%,” says McCormick, who identifies the growth as coming from new clients adding the software and established clients employing the credit-card option more often in response to consumer demand.

“There are different ways a company can accept credit cards,” he adds. “Very often, they have a credit-card processor, they have it on their website. The customer comes in, puts in their invoice number and does it that way that. But with our system, it gives you more value because the credit-card payment is integrated with whether it’s a deposit, a pre-pay or an auto pay on a PHC (plant health care) program or a lawn-care program.”

There are many different ways customers use their credit cards via software packages, explains Ka Tsu, vice president of sales and marketing for ServicePro, a six-year TCIA corporate member company based in Columbus, Ohio, and maker of the ServSuite software for tree care. They may go online to pay for services, receive emails with credit-card links or put credit cards into a tree care company’s system for regular services such as a PHC program or payment plan. “There are a lot of different options,” Tsu says.

“It’s not that people don’t want to pay cash, but their definition of cash has evolved,” says Mike Triplett. “Providing a method of payment electronically is just the normal way of doing business with the younger consumer.” Image courtesy of ServicePro.

“I think all service companies are first and foremost going to offer their clients choices, so it’s really based on how a customer wants to interact with a payment solution,” says Ed Rockhill, chief operating officer for Arborgold, which, like other tree care-operation software, includes credit-pay options for its clients and their customers. “Some are comfortable with technology and others would still rather write a check, so we have to be prepared to handle both.”

Tree care businesses considering the adoption of credit cards or changing some business practices also are being influenced by a generation of consumers that is used to using credit and using it in multiple ways.

“It’s not that people don’t want to pay cash, but their definition of cash has evolved,” says Mike Triplett, sales manager of ServicePro. “At the end of the day, generations change in terms of ways of doing business. I’m a Gen Xer. Back in my day, writing checks and paying cash and waiting for responses was part of doing business with people. As a consumer, you were more patient. That’s all relative, in terms of what you think the definition of patience is.

“Nowadays, it’s moving to a more cashless society where it’s more convenient. Modern technology now provides us with ways of doing business we didn’t have 20 years ago. Consumers don’t want to wait long to get things done. Years ago, if people wanted an estimate for tree work or lawn care, they would have to wait a week or two for three or four companies to come out and give them a quote, and then they’d decide who to go with. Now they can get three of four quotes in a day and make a decision the same day.

“And they’re more willing to pay. My parents, and my wife and I until recently, were always reluctant to sign up for autopay (and giving out bank information). Now, providing a method of payment electronically is just the normal way of doing business with the younger consumer.

“That’s another thing that factors into the growth of credit cards and the necessity for businesses to allow them as a form of payment. That’s what I’ve learned.”

Getting used to fees

The big negative to offering credit cards is the fees, which in general add somewhere between 2.5% to 3.5%, although it’s sometimes wrapped up in different terms and types of service fees that can make it worth reading the fine print.

“The (credit) industry is really shady when it comes to fees, so it can get kind of messy,” says McCormick, whose company does its own processing. “They say it’s a 2.9% fee, but then they add all this stuff on top of it, which makes it more. We always have to read the fine print. We’re at 2.9% flat rate, which makes it real beneficial. But one of the features we have within SingleOps is the ability to automatically – if your customer pays by credit card – charge that fee on top of it. Many, many of our customers who accept credit cards pay zero fees. It’s all automated through the system.”

For a company writing $1 million to $5 million annually in business, fees can add up. In a hypothetical case using 3% as the processing fee, that’s $30,000 for a company doing $1 million in business. That’s the reason some tree care companies are reluctant to offer credits cards for any or all services.

“There are options to pass fees off to clients, and they can build pricing around that to offset the cost,” said Rockhill. “Some companies can do this and some can’t, based on state laws. Most see it as a better way of doing business, and so they either accept the fees or pass them on.”

Although not legal in most states, some tree care companies opt to avoid the fee by providing it as an option for their customers and passing the charge on to them as a surcharge.

“You can control it,” McCormick says. “You don’t have to take credit cards for all of it. Typically, you may deliver the invoice via email. You can have separate templates – a template for smaller jobs that asks for a credit card and a template for larger jobs that doesn’t. You can totally configure that within SingleOps.”

SingleOps has seen credit-card use grow almost 200% annually, both from new clients adding the software and established clients employing the credit- card option more often. Image courtesy of SingleOps.

Credit-card charges are determined by two entities – the issuing bank (which puts up the money) and the processor, which facilitates transactions between business owners, the bank and their customers. Some processors partner with software developers, or they might have a direct relationship with businesses, supplying the tools for those businesses to accept credit cards. Both charge fees, which can add up to the total percentage.

Amy Grewe, vice president at Arbor Aesthetics Tree Service, an accredited, eight-year TCIA member company based in Omaha, Nebraska, explains that her company uses CardX, one of the processors integrated with Arborgold Software.

“With CardX, we were given the option of passing some fees on to our clients and covering other fees ourselves,” Grewe says. “After spending nearly $26,000 in one year on credit-card fees, especially as our plant-health-care department was growing, we decided we needed to change something, but without penalizing our clients for wanting to pay online for convenience.

“CardX was the perfect solution for us. If clients want to pay with a credit card, they’re charged a 3.5% fee. If they pay with a debit card, there is no fee (and we pay a small 1% fee). We feel this is a good middle-of-the-road solution. We were nervous about charging for credit cards, but most of our clients are very understanding, and for the few clients who have complained, we’ve offered to refund half of their fee as a one-time courtesy, and that works well for maintaining the relationship. If we could change one thing, we wish we could offer no-cost bank transfers. We hope that is a service that will soon be offered.

A big negative to offering credit cards is the fees, which in general add somewhere between 2.5 to 3.5%, though sometimes those rates can be negotiated. Image courtesy of ServicePro.

“For tree services (not plant health care), we still make it known that it is our policy to collect payment upon completion and that our crews will be ready to collect a check,” explains Grewe. “Around 50% of our clients are still happy to pay by check. Being upfront in our sales process about our billing and payment procedures has certainly been helpful in acquiring clients who are agreeable to our policies.”

Other processors

Not every company that accepts credit cards uses management software, and not every company that uses software packages such as ServSuite, Arborgold or SingleOps uses the processors that come with the programs.

“Yes, I would say there are companies that have payment solutions in place where the client can swipe a card on site, and that may not be connected (to a software program),” says Arborgold’s Ed Rockhill. “That’s not always possible if the property owner isn’t present at the time of service, so it gets a little more difficult.”

Scott Bagala is president of strategic partnerships with Tree Top Payments, a first-year TCIA corporate member based in Santa Rosa, California, and a credit-card processing company that specializes in the tree care industry. Among the things Tree Top Payments provides is technology to take payments from customers in the field or via computer, along with tailored plans for clients that can be beneficial for some businesses. One piece of advice Bagala has for business owners is to pay attention to the processing rates they’re being charged and understand that processors often quietly push up their rates.

Increasing cash flow is important, and accepting credit cards is one way of doing that, says Scott Bagala. Image courtesy of Tree Top Payments.

“If you’ve been accepting credit cards for years and you haven’t had an audit done, (be aware that) this industry is known for rates increasing,” Bagala says. “If it’s been more than a year or two since someone’s done a review, odds are your rates have increased without you even knowing it.”

Here’s another important part; as Tsu and Bagala both note, those percentages can be negotiated.

“If you have a higher volume of credit charges, the rate can go down,” Tsu says. “Just like anything else, it’s all about volume.”

“If somebody is doing a million dollars a month in processing, we’re going to want to sharpen our pencils quite a bit and get their rates as low as possible to try to win that business,” Bagala says. “That’s another piece of the puzzle. The system can be tiered for volume.

“We like to tailor the plan to fit their business best, instead of a one-size-fits-all approach,” says Bagala.

That includes adjustments for “card-
present” transactions – when the card is physically swiped in the field – which are cheaper to accept for the merchant than “card-not-present” transactions, where the information is conveyed by the customer reading the card to someone in the office or typing in the information.

“’Card-present transactions are cheaper to accept for the merchant because there’s less risk involved when the card is present,” Bagala says. “Any time there’s more risk, the rate goes up. We’re always trying to give our merchants a way of saving the most money that they can.”

Opportunity found

For the company that doesn’t take credit at all, there are a number of benefits for changing their approach: cash flow, convenience, reduced overhead, great efficiency and opportunities to win jobs from clients who want to use credit and not write a check.

“Increasing cash flow is extremely important, and that’s one way of doing it,” Bagala says.

For credit holdouts, there also might be another factor – they won’t lose business to a competitor that offers simpler payment options.

As many see it, the trend is as clear as it is overdue.

“The green industry as a whole is one of the last major industries to embrace credit cards,” says McCormick, who says he’s been told that about 6% of the total revenue in the tree care industry goes on credit cards. “That’s unheard of in any other major industry. If the return on investment wasn’t there, the world wouldn’t pretty much run on credit cards. So, the return on investment is there. Every other major industry has realized it.

“If you really take it to the next level, the return on investment (of taking credit) is one of the best investments you can make in your business, and it’s so easy to do it. It doesn’t take months to get it going. Literally, just fill out a form and, boom, you’re ready to go.”

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