How to get paid for your work

Key takeaways:

• As you start your business, it’s important to figure out the payment methods you’ll allow your customers to use.
• If you want to accept credit card payments, you’ll need to enroll in merchant processing to allow you to process card payments.
• With payments comes the responsibility of securing your customers’ data, so you should consider this when selecting your payments.

Starting your own business is exciting. Maybe you’re trying your hand at freelancing or you’re opening a retail store front. Regardless of your business, it’s important to determine how to get paid for the work you do. And while earning money is the fun part of working, it’s not exactly as easy as it may seem.

Considering there are many ways your customers can pay you, you’ll have to decide which methods you want to use. Here are some of the most common options:

Credit cards: For your customers, being able to pay with a credit card is likely an expectation. When your business accepts major credit cards, you improve cash flow, minimize loss and broaden your customer base.

To do this, you’ll work with a bank to give you access to the card network payment system. The bank will oversee your compliance with card network rules. For example, with credit card payments comes the responsibility of protecting your customers’ privacy and data security.

At MidWestOne, you would enroll in merchant processing. It’s a secure and fast way to process card payments from your customers. Payment options include electronic, software, web and wireless processing.

Debit cards: Similar to credit cards, you’d work with a bank to accept the payment system. You would also be responsible for your customers’ data security. However, with debit cards, you may pay lower fees for debit transactions than you do for credit card transactions.

Checks: Instead of traveling to the bank every time your customers write checks, you can utilize remote deposit capture. This helps you deposit your money without ever leaving your business. When you receive a check, you scan it and send it to MidWestOne to process electronically. This helps reduce your trips to the bank, processing costs and return item risk.

If you have consistent monthly payments from a customer, you could consider initiating a recurring debit from the customer’s checking account. The customer would have to agree to this, but it could be a convenient way to receive a payment each month without the hassle.

Mobile payments: You could also choose to allow your customers to make payments using accounts linked to their smartphone. This takes the traditional plastic card out of the transaction, but it comes with an extra set of responsibilities regarding data security.

Whatever payment methods you choose to accept, familiarize yourself with the rules and procedures outlined from your bank, credit card companies and other payment platforms you may use.

Accepting payments securely and successfully is one of the first steps to running your business. If you have questions or are interested in setting up merchant processing, visit your local MidWestOne branch.

MidWestOne Bank does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.