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How do you process payments for services?

by DesignerRamsey
19 replies
  • WEB DESIGN
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I've run into a very sticky situation - I use Paypal to bill my clients for design services. I trust that when they say they are satisfied with it I can use the funds. Paypal offers no security for service providers. So when someone forgets they had a service done 2 months ago and see the charge - they do a chargeback with their credit card company - Paypal deems the merchant GUILTY until proven innocent. They pull the funds and lock the account, so basically the merchant is screwed.

So now I'm thinking Paypal may have to go. I'm looking for other ways of receiving payment from clients that will be more secure and fair to me as well as to the client.

Anyone use Escrow.com for this type of thing? I use them for website sales. They seem to be fair with it.
#payments #process #services
  • Profile picture of the author website design
    escrow.com is very established and can be trusted by both parties. Money is deposited and held in a third parties hands until the final completion of the project where funds are released.

    Highly recommend.
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    • Profile picture of the author DesignerRamsey
      Yes, that is my conclusion too - think that's the way I will go from now on.
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  • Profile picture of the author Steve Wells
    Originally Posted by DesignerRamsey View Post

    I've run into a very sticky situation - I use Paypal to bill my clients for design services. I trust that when they say they are satisfied with it I can use the funds. Paypal offers no security for service providers. So when someone forgets they had a service done 2 months ago and see the charge - they do a chargeback with their credit card company - Paypal deems the merchant GUILTY until proven innocent. They pull the funds and lock the account, so basically the merchant is screwed.

    So now I'm thinking Paypal may have to go. I'm looking for other ways of receiving payment from clients that will be more secure and fair to me as well as to the client.

    Anyone use Escrow.com for this type of thing? I use them for website sales. They seem to be fair with it.
    From what I know about Paypal, anyone offering services are in the right, more than the buyer. Especially if you set-up the payment as a service. Meaning, you send them a invoice, and lable it as a service.

    I've thankfully never had anyone do that, and I have had lots of clients.

    If I were you I would invoice them through paypal.

    One other thing I do, is I have a payment gateway script set-up where they are dispatched an email after they purchase that tells them to make sure they that remember that my company name will be on their charge card.

    That helps lots I am sure. I just do my best to communicate with them, and let them know whats going on. But invoicing is the way to go for sure.

    You need a verfied business account though I believe.
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  • Profile picture of the author freeburd
    What about doing it old-fashioned way: accept a deposit check and start the process after it is cleared?

    Originally Posted by DesignerRamsey View Post

    I've run into a very sticky situation - I use Paypal to bill my clients for design services. I trust that when they say they are satisfied with it I can use the funds. Paypal offers no security for service providers. So when someone forgets they had a service done 2 months ago and see the charge - they do a chargeback with their credit card company - Paypal deems the merchant GUILTY until proven innocent. They pull the funds and lock the account, so basically the merchant is screwed.

    So now I'm thinking Paypal may have to go. I'm looking for other ways of receiving payment from clients that will be more secure and fair to me as well as to the client.

    Anyone use Escrow.com for this type of thing? I use them for website sales. They seem to be fair with it.
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    • Profile picture of the author DesignerRamsey
      Originally Posted by freeburd View Post

      What about doing it old-fashioned way: accept a deposit check and start the process after it is cleared?
      That's one way, but it delays work by at least 2 weeks.
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  • Profile picture of the author SteveJohnson
    Originally Posted by DesignerRamsey View Post

    I've run into a very sticky situation - I use Paypal to bill my clients for design services. I trust that when they say they are satisfied with it I can use the funds. Paypal offers no security for service providers. So when someone forgets they had a service done 2 months ago and see the charge - they do a chargeback with their credit card company - Paypal deems the merchant GUILTY until proven innocent. They pull the funds and lock the account, so basically the merchant is screwed.

    So now I'm thinking Paypal may have to go. I'm looking for other ways of receiving payment from clients that will be more secure and fair to me as well as to the client.

    Anyone use Escrow.com for this type of thing? I use them for website sales. They seem to be fair with it.
    If you're in a service business, you have no need for an escrow payment setup. You bill according to the contract you have with the client - a percentage upfront, balance on completion, or balance in full in advance, etc.

    You might want to check that the name that shows on your client's credit card statement is correct - that it reflects the name that you do your service work under. It can be found in the Profile section of your PayPal account.

    I deal with an average of 30 different clients every month, and have for the last 10 years or so. I have never - NEVER - had this problem.

    Also - when there is a dispute at PayPal, they don't normally "pull the funds and lock the account". Yes, the funds will go, as will the chargeback fee, but unless there's something else going on, the account won't be locked.

    You have had this happen to you?
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    • Profile picture of the author escribe
      Can you share your payment gateway and script Steve W? That sounds like another really good option for those of us collecting payments.
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      • Profile picture of the author GabbyCaz1
        Paypal is not what it use to be. I use a combination of paypal and 2checkout for payments.
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  • Profile picture of the author sylviad
    Possibly if you set up payments through Paypal via some sort of optional buy button, you would avoid this issue.

    Paypal has an option where you enter several different price points, so people can choose a particular price from a drop-down list. I use that for newsletter ads. They have the option of 4 different ads at 4 different prices. That way, Paypal should be better able to track that the order was placed through your account by the client, as opposed to having them just send you a payment through your PayPal email.

    Apart from that, I'd go with what SteveJohnson offered, paying special attention to the name on your invoice as it shows in the client's credit card statement. As soon as they order, send them a confirmation of order indicating the name they will see charged on their account for this service.

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    • Profile picture of the author Tina Golden
      If you state that the payment is for a service, there is no buyer protection and the seller will win a dispute every time.

      However, everyone seems to be addressing what PayPal will do and that's not the concern voiced in the OP. He specifies a chargeback - that is not PayPal's fault, it's the credit card company. Most of the time, that is going to be hard to win (but I have heard it can be done).

      What people don't seem to understand is that PayPal doesn't have a choice in this. They can fight on your behalf (and they do) but if they don't honor it and pull the money back until it's settled, the credit card companies will stop working with PayPal.
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  • Profile picture of the author rockone
    You can try out AlertPay if you are unhappy with PayPal due to this.
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    • Profile picture of the author Brian E Adams
      Originally Posted by rockone View Post

      You can try out AlertPay if you are unhappy with PayPal due to this.
      Rockone,

      Is Alertpay a real option? Are they more well behaved than Paypal? I see all to many people getting their Paypal account frozen, because they earned too much money or are doing IM.
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  • Profile picture of the author MIRENGE
    This is new to me. I thought that paypal is the best because as far as i know its widely used.
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  • Profile picture of the author myeanne
    We always ask our client to pay us upfront. It's kinda hard to convince them but after giving them several samples made by our staff and client references. We end up closing the deal. It's not how the payment processed but how you delivered quality works.
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    • Profile picture of the author DesignerRamsey
      Originally Posted by myeanne View Post

      We always ask our client to pay us upfront. It's kinda hard to convince them but after giving them several samples made by our staff and client references. We end up closing the deal. It's not how the payment processed but how you delivered quality works.
      In my case - I did this. What happened was the client didn't know what the charge was on their credit card bill - because they had pulled "part" of the fee from their credit card and used part of their available funds. They did a chargeback - and it was a mistake. Once I was alerted I contacted the client - they realized the mistake, but it was too late. Paypal had taken the funds from me (I did not have enough balance to cover it) and her card company had closed the account once they pulled the funds. She ended up paying me again for the mistake.

      What I'm saying is - I did everything right - I delivered quality work. I had a signed contract. But it's not smart to assume it will never happen to you - even if you've had an account for years and years with no problems. Unless you keep thousands available in your account, it could be devastating to suddenly find out, even with a mistake, that all the funds were pulled and you have a negative balance.
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      • Profile picture of the author xtrapunch
        Originally Posted by DesignerRamsey View Post

        In my case - I did this. What happened was the client didn't know what the charge was on their credit card bill - because they had pulled "part" of the fee from their credit card and used part of their available funds. They did a chargeback - and it was a mistake. Once I was alerted I contacted the client - they realized the mistake, but it was too late. Paypal had taken the funds from me (I did not have enough balance to cover it) and her card company had closed the account once they pulled the funds. She ended up paying me again for the mistake.
        In this case, it's just a mistake. You cannot make any system foolproof. There's no reason why you should go hunting for a new payment system. Paypal is the most popular one and buyers have confidence and trust using it. So you are in a better position than using any other system.

        Escrow can be recommended only when you are getting more than $1,000. Again, it costs a lot more that way. I always ask my clients to send the money to my PayPal email. Never have had any problem.
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  • Profile picture of the author jaredblake
    Paypal is the simplest, easiest to set up, and cheapest option out there. We use it. You can even use it to set up automatic monthly payments. Just tell them what the cahrge on their credit card is going to be. No problem.
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  • Profile picture of the author m2weblogs
    What about moneybookers ?
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    • Profile picture of the author QuickSurf
      Easiest way to deal with paypal is to use the invoice option for "services"... so many people don't do that and if an issue arises on the buyers end, their generally going to side with the buyer. However if you use the invoice option... majority of the time they will side with the seller (you). Pretty easy as now you have the invoice and can prove whatever service you did, if you built them a website, you show paypal the invoice, the site, and transfership etc. If you did press release, show that, if you did backlinks you can show a report of the links etc.
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