3 Ways to Integrate Alternative Payment Methods Into Your Practice Posted on January 12, 2016 by Larry Bodine By Billy Skinner, Attorney, Houston, TX The ways people pay for goods and services is continuously changing. Instead of using traditional cash, check and credit card methods, consumers are increasingly becoming more creative and technology-based in the way they close transactions. According to the 2014 Annual Billing Household Survey, the average U.S. household uses three different payment methods each month. Law practices can incorporate new and alternative payment methods into their routine to ease the payment process for clients. These methods can create convenient ways to accept payments, and reduce the time it takes for some attorneys to get paid. Rather than having to bill clients through traditional mail or follow-up to remind them to send a check, clients can, for example, see what they owe and pay online when they want and how they want. Although there are dozens of ways to accept payments for legal service, below are some of the most promising suggestions for incorporating new payment methods into a practice. Accept Credit Card Payments Online It has become common practice for consumer-oriented law practices, such as family law and criminal defense, to accept credit card payments from clients in person, but now more firms are beginning to accept payments online. The process generally is easy, and the payment is received almost immediately. Law firms can acquire payments through an online payment form on their website, which provides a simple way for clients to pay from nearly anywhere at any time. Online payment pages are versatile tools that can be used for one-time payments, registration forms, or for collecting billing information for recurring payments. Law firms can accept online payments in two different ways: Using a merchant account: If a business owner chooses to use a merchant account, the account must be opened through a bank or payment processor, through which you can typically negotiate cheaper rates. A third-party merchant account provider such as Stripe or Square would enable a practice to accept credit cards payments typically more easily, however, with a higher cost per transaction. Practices can also choose to entirely outsource the payments process by accepting online payments through payment services like PayPal or Google Wallet. These services allow people and businesses to safely share money electronically. If a client uses PayPal, he or she only would have to enter credit card information once. PayPal would store the information and your business would never have to access it. Having a payment option clients recognize and trust could ease some worry clients have concerning paying online. Utilize Electronic Checks Consumers rarely choose to pay with paper checks these days, but that doesn’t mean checks are irrelevant in current commerce. A new spin on the classic payment method is electronic checks, or eChecks, which allow consumers to pay for goods or services directly from their bank account just as they would with a paper check, but it is done electronically. This method, also called ACH, can be processed in fewer steps and can be more secure than old-fashioned paper payments. The electronic payment provides several safeguards, including authentication, public key cryptography, digital signatures and encryption. Electronic checks contain the same information, such as banking and routing numbers, and can be used in any transaction where paper checks are used. The process for electronic checks is similar to that of a paper check. To be able to accept eChecks, your practice must first have a merchant account with eCheck capabilities, which most bank or payment processor provided merchant accounts now include at a negligible extra cost. Then, if a client opts to use an eCheck, he or she would fill out an online payment form, typically located on your website on the same page where they might otherwise enter their credit card information, to authorize one or more transactions. Alternatively, you can simply have the client complete an old-fashioned paper ACH authorization form (obtain a sample form here). Once the form is completed, the information would be electronically deposited by the payment processor, all automatically. The paying bank would validate the eCheck, and shortly thereafter the practice would then receive a credit for the amount deposited into the practice’s account, and client’s account would be charged. Electronic checks can provide an easy payment option for clients who do not want to enter credit card information online, or who do not have a credit card. Echecks are safe, as they are backed by banking regulations, and they are offered by nearly every major payment gateway. Electronic checks also typically pose significantly lower processing fees than other payment options, in the range of 0.5% for eChecks as opposed to 3.0% for credit cards. Implement Click-to-Pay Email Invoicing Another alternative payment option law practices can use is click-to-pay invoicing. The method is fairly new, but the idea behind it is simple. Law firms can send electronic invoices to their clients with a breakdown of the fees owed, and the client can make a payment electronically, initiated from within the email invoice. This option enables clients can pay their bill and receive a receipt for the transaction almost immediately. To be able to use Click-to-Pay invoicing, a practice must use a merchant account provider that provides this capability for their customers. It is typically offered at no additional cost. Two providers of this technology are Intuit Payment Network and Soar Payments, or for a completely outsourced option at a slightly higher cost, attorneys can use Square. The invoices can be customized however the law firm prefers. For example, it could include a line-by-line explanation of the costs, as well as due dates and any penalties or interest that could be incurred if the payment is received late. Each invoice can have a professional look and feel with user-friendly forms for instant payment. Since the invoices would be sent directly to clients, it could decrease the amount of time between clients receiving their bill and attorney’s getting paid. This method also allows you to keep your records secure and up-to-date. Once the invoice has been paid, your client balance can be updated automatically to reflect the payment. If the person pays on a scheduled basis, the click-to-pay invoices could simplify the process for both the law firm and the client by sending invoices automatically. In some industries, like apartment complexes, this system has already become widely used because of its advantages for reducing payment friction for repeat payments. Additionally, when a client uses the invoice to pay, he or she still could have the option of using credit or debit card information, eChecks, or other online options. This method allows the client to pay using whichever method he or she desires, but it centralizes the payment process. When an invoice is paid, funds are delivered directly to your firm’s account and the process is complete. Removing friction from the payments process The list of possible payment methods for your law practice are constantly growing and continuously evolving with technology. The goal isn’t simply to offer alternative payments just for the sake of doing so, but rather as a method of removing friction from the payments process, either by offering convenient options, reducing accounts receivable, or streamlining invoicing. The best way to determine the right alternative payment methods for your practice is learning all you can about the pros and cons of each option, as well as the costs associated with each particular method, and closely examining the needs and friction points of your unique practice. Ultimately, properly incorporating alternative payment methods into your practice could be a way to ease the payment process for your clients, and ensure you receive compensation for your services faster and more efficiently. Billy Skinner is the founder of Skinner & Associates, a law firm dedicated to criminal defense and representing individuals wrongly accused of sex crimes in Texas. Follow Billy on Google+ and Twitter.