On a $6,000 invoice, the method beats the rate.
Firms invoicing other businesses have the largest tickets and the most expensive card mix in this market. ACH, Level 2 data and retainer handling move far more money than any rate negotiation.
What this page settles.
Three questions, in the order most people ask them.
Why professional services are priced badly
A firm invoicing other businesses — a law practice, an agency, an accountancy, a consultancy, an engineering office — sits at the expensive end of this market for two structural reasons.
The tickets are large. A $6,000 invoice at 2.9% is $174. The per-transaction fee is irrelevant; the percentage is the whole cost, and it has no ceiling.
The cards are commercial. Clients pay with business and corporate cards, which carry materially higher interchange than consumer cards. You have no say in which card a client chooses, and under a flat rate you cannot even see what it cost you. What is interchange.
Those two together mean a firm can be paying 3% or more on revenue, with nothing about its behaviour to blame and no rate negotiation available that would move the number much.
Which is why the three levers below matter more than the rate. Each of them is worth multiples of what a half-point negotiation would deliver, and most firms have never been offered any of them.
ACH, which is the whole game
Card fees are a percentage with no ceiling. ACH fees are typically a percentage with a cap of $5 to $10.
On a $6,000 invoice that is roughly $10 against roughly $174. On ten such invoices a month it is $100 against $1,740 — $19,680 a year, from one change.
Three things make this easier than it sounds for professional services specifically:
Your clients are businesses, and businesses are used to paying by bank transfer. Many prefer it. There is no consumer discomfort to overcome.
Your invoices are predictable and scheduled, which suits ACH’s slower clearing. You are not waiting at a counter for an answer.
You can make it the default. Put ACH first on the invoice, with the card option below it. Most clients take the default. Some firms decline cards entirely above a stated amount and say so on the invoice; it is common enough not to be remarkable.
The honest caveats: ACH clears in days rather than hours, you learn about a failure after the fact, and returns carry fees. For a firm invoicing businesses on terms, none of those is a real obstacle. ACH or card, in full.
If this page changes one thing about your firm, make it this one.
Level 2 data on commercial cards
When a client does pay by card, this is the lever.
Commercial and corporate cards qualify for reduced interchange when the transaction carries extra data — for Level 2, typically a tax amount and a customer code. The reduction is real, commonly in the range of 0.5% to 0.8% on those transactions.
On $60,000 a month of commercial card volume, 0.6% is $360 a month.
Two conditions:
Your gateway or terminal has to support the fields, and plenty do not by default. Ask explicitly.
Someone has to actually fill them in, which is the part that fails. If the fields exist but every invoice goes out with them blank, you have the capability and none of the benefit. Build it into the invoice template rather than relying on anyone to remember.
Work out whether it is worth the setup before committing: count your commercial card transactions, multiply by average invoice value, multiply by 0.6%. For a firm with real commercial volume the answer is clearly yes; for one with three such invoices a month it is not. Level 2 and Level 3 data.
Retainers and cards on file
Firms taking retainers or billing monthly need a stored card, and the way it is stored matters.
Tokenize it. The gateway stores the card and returns a token; the firm never holds a number. Not a card number in a matter file, not a form in a drawer, not a line in a practice management system. Every one of those puts card data in a system you control and gives you something to lose. Tokenization and P2PE.
Get written authorisation that is specific. What you may charge, up to what amount, in what circumstances, and how the client withdraws it. “Card on file for fees as incurred” is not specific and will not survive a dispute. How to fight a chargeback.
Expect card-not-present pricing on stored-card charges, because the card is not being read. Correct, unavoidable, and small next to not collecting.
Set up account updater if you bill monthly. Cards expire and get reissued; without it, every reissued card is a failed bill and a chase. Moving recurring billing.
And consider ACH for the retainer too, for all the reasons above. Bank details lapse far less often than cards do.
Trust accounts
For firms operating client trust accounts — law practices most obviously — there is a structural requirement that generic payment advice does not cover.
Processing fees must not be deducted from the trust account. Fees come out of the operating account, and earned fees and client funds are not commingled.
That means your processing has to support funding to one account and debiting fees from another, which not every provider does cleanly. It is a specific question to ask at the quoting stage, in those words, rather than a detail to resolve afterwards.
Gross versus net settlement is also relevant here: gross funding, where you are deposited in full and fees are debited separately, is the arrangement that keeps this clean. Net funding, which deducts fees from every deposit, is the one that makes it difficult.
Your bar association or professional body will have rules on this. They are the authority, not your processor.
What to look at on a quote
ACH availability and its cap. For a firm invoicing other businesses this is the first question, not an afterthought.
Level 2 support, named explicitly, and whether the fields can be populated automatically from your invoicing system.
Whether the quote is interchange-plus. At these ticket sizes and with this card mix it will beat a flat rate, and it is the only arrangement where you can see what commercial cards are costing you.
Separate funding and fee accounts, if you operate a trust account.
Your per-transaction ceiling. A firm that occasionally invoices $40,000 needs that approved in advance rather than discovered on the day. Held funds and reserves.
The gateway, and whether your practice or invoicing software already includes one. Gateway fees.
What we charge
Interchange + 0.50% + 10¢ in person, interchange + 0.75% + 25¢ keyed, with no contract, no monthly fee and no monthly minimum, with ACH on the account.
For a professional services firm the rate is rarely the interesting part. Send us a statement and we will show you what share of your volume is commercial cards, what Level 2 would save on it, and what moving the large invoices to ACH would be worth. That last number is usually larger than everything else combined.
While we are on the subject
Why do my clients' cards cost more?
Business and corporate cards carry higher interchange than consumer cards. Sending the extra data fields on those transactions reduces it, often by half a point or more.
Should I accept cards at all for large invoices?
Offer ACH first and prominently. Plenty of firms decline cards above a stated amount and say so on the invoice; it is common enough not to be remarkable.
Can I pass the card fee to clients?
In defined circumstances and with real rules attached. For professional services billing other businesses, offering ACH as the default is usually simpler and better received.
Can I store a client's card for a retainer?
Yes, tokenized, with written authorisation stating what you may charge and when. Never by keeping the number in a file or a practice system.