ACH payments cost contractors about one dollar per transaction instead of the percentage-based fees that credit cards charge, yet most construction businesses keep losing thousands annually because they haven't explored this straightforward alternative to traditional payment processing. Learn more: https://app.builderpaypro.com/.
Credit card fees are draining money from contractor bank accounts every single day, and most construction business owners have just accepted it as the price of doing business. But here's the truth nobody talks about: you don't have to keep paying thousands of dollars a year just to collect the money you've already earned. Let me break down what's really happening when you accept a credit card payment. Every time a client swipes their card to pay your invoice, you're getting hit with multiple layers of fees. There's the interchange fee, which runs anywhere from 1.5% to 3.5%. Then there's an assessment fee that tacks on another 0.13% to 0.15%. And your payment processor throws their own markup on top of all that. When you add it all up, you could be losing 3% to 4% of every payment. Now, that might not sound catastrophic until you do the actual math on a real construction invoice. Let's say you just finished a project and sent out a $50,000 invoice. If your client pays with a credit card, you're immediately losing $2,000 or more in processing fees. That's $2,000 that could have gone toward new equipment, hiring another crew member, or just keeping your cash flow healthy during slower months. The frustrating part is that contractors deal with this problem differently from most other businesses. A coffee shop processes tons of small transactions, so they're paying those percentages on $5 lattes and $10 sandwiches. But construction work means fewer transactions with much bigger dollar amounts. So what do most contractors try first? They call up their payment processor and attempt to negotiate lower rates. And this rarely works the way people hope it will. Here's why: the card networks themselves control most of those fees. Your processor can only negotiate their small slice of the pie. Even if they cut their markup in half, you're still losing most of that money to fees they can't touch. Some contractors try getting creative by adding surcharges to credit card payments or passing those fees directly to customers. But this creates a whole new set of problems. You've got to comply with different state laws about surcharging. You need to disclose everything properly on your invoices. You have to separate credit card transactions from debit card transactions. And honestly, adding 3% or 4% on top of an already large invoice can make your bids less competitive and create awkward conversations with clients who weren't expecting it. There's another approach called cash discount programs, where you advertise higher prices and then offer discounts for non-card payments. But this gets messy fast because you're basically running 2 different pricing structures, and clients find it confusing. Here's what actually works: ACH payments. And before you tune out because that sounds technical or complicated, stick with me because this is simpler than you think. ACH stands for Automated Clearing House, and it's basically a way to move money directly from your client's bank account to your bank account without involving credit card networks at all. Instead of paying a percentage of every transaction, you pay a flat fee. And that flat fee is usually somewhere between $0.20 and $1.50 per transaction, no matter how big the payment is. Let's go back to that $50,000 invoice. With a credit card, you lose $1,500 in fees. With ACH, you might pay $1. That's not a typo. $1 instead of $1,500. Suppose you're processing several large payments throughout the year. In that case, we're talking about saving thousands of dollars that would otherwise be lost to payment processing fees, allowing them to stay in your business. Now, you might be thinking this sounds too good to be true or that it must be complicated to set up. But ACH actually fits really naturally with how construction projects work. Your invoices follow project milestones, not daily transactions like a retail store. So the fact that ACH takes 1 to 3 business days to settle isn't a problem because you're not expecting instant payment anyway. And here's something most people don't realize: credit cards aren't actually faster. Sure, they authorize instantly, but that money doesn't hit your account any quicker. Credit card settlements typically take 2 to 3 business days, which is basically the same timeline as ACH. The other advantage is that businesses already use ACH all the time. Your clients are probably already paying their own vendors, processing payroll, and handling other business expenses through ACH. So you're not asking them to do something weird or unfamiliar. For commercial clients, especially, their accounting departments are totally comfortable with ACH because they do it every day. The key to making this work is positioning ACH as your preferred payment method while still accepting credit cards as a backup option. You're not forcing anyone into anything uncomfortable. You're just making ACH the default and letting clients know they can still use a card if they really want to. Most contractors who do this find that 70% to 90% of clients willingly switch to ACH once they understand the process. Timing matters here. Don't wait until you're sending the invoice to bring up ACH payments. Introduce it when you're signing the contract. Include a simple authorization form right alongside your standard paperwork. This way, clients set up their bank account information upfront, and paying by ACH feels like a natural part of working with you rather than a last-minute surprise. The good news is that the technology side has gotten way easier in recent years. There are platforms built specifically for contractor payments that handle all the technical complexity for you. You don't need to become a banking expert. The software takes care of bank account verification, payment tracking, and all the backend processing. The bottom line is this: payment processing is a strategic decision, not just a passive business expense. Click on the link in the description to explore options that work for construction businesses.
Builder Pay Pro
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Website: https://builderpaypro.com/