“Do you take cash? I have ID.” I actually overhead a customer say that in a restaurant once. The teenage employee at the counter didn’t get the joke, but for those customers within earshot who remember life before credit cards found it clever.
Plastic is king in America. Take that fact, multiply it by the expense of flight training, and not accepting credit cards is a business decision that may be costing you customers. Historically the justification for avoiding such transactions was based in logic. Even the smallest operation needed some equipment and a master’s in accounting to figure out the point-of-sale system.
A new product called Square is aimed squarely at answering these problems. Square is a … well, square that accepts credit cards. It’s a one-inch piece of plastic that attaches to a cell phone. Take the device, attach it the phone, and swipe. There’s really not much more to it than that.
Traditional issues such as receipts, fees, and other concerns are handled elegantly as well. The company takes pretty much any credit, debit, or gift card with a Visa, Mastercard, American Express, or Discover logo. Regardless of the card, the fee is a flat 2.75 percent per swipe, or 3.5 percent plus 15 cents if the numbers are entered manually. Payments are made via a direct deposit to a linked bank account that evening or the next.
From the customer’s standpoint, the experience can be either slightly modified from a normal credit card transaction or pretty much seamless, depending on your school’s level of sophistication. If you are an independent instructor with no brick-and-mortar facility, the service will email your client a receipt. Those with slightly more advanced setups can link a printer that will give the student the evidence immediately. It will also link with a cash drawer for more flexibility. You can also process refunds for transactions less than 60 days old.
Other providers have similar business models, but slightly different pricing and banking models. PayAnywhere charges 2.69 percent plus 19 cents per transaction, while GoPayment from Intuit 2.7 percent. A nice feature of GoPayment is the ability to pay a $12.95 monthly fee and reduce the processing charge to 1.7 percent. Like Square, these rates go up for a keyed in credit card number.
That can add up, especially for flight training providers who keep credit cards on file. Another thing to watch out for is that Square caps keyed in payments to $1,000 every seven days from a single customer. Fly three times a week or more with one student, and you could face that limit. Essentially the limit places a hold on the account. So you’ll get paid, but not quickly.
With such an easy user experience from both the customer and school perspective, there’s no longer a reason not to accept plastic—even if your only business tool is a cell phone.
Ian J. Twombly
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