Get a complete understanding of how credit card invoice works to avoid interest charges and unnecessary fees, to protect your credit score.

Credit Card Invoice – How Does It Work?

If you’re looking for a more secure way to get paid for your goods and services, then credit card invoicing might be the right solution for you. This type of invoice is designed specifically for credit and debit card payments.

If your business is yet to accept credit card payments, this type of invoicing might seem daunting. However, you’ll be surprised at just how easy credit card invoicing is and how beneficial it can be to your business.

This article will discuss what a credit card invoice is and how it works. We’ll also talk about the benefits of using a credit card invoice, so you can decide if this type of invoicing is right for you and your business!

What is a Credit Card Invoice?

A credit card invoice is a type of billing statement delivered to clients to collect payment solely via debit or credit card. You can use it for billing materials sold or used, services rendered, or any combination of the two.

A credit card invoice contains the following: 

  • A field for credit card fees
  • The card and CVV number
  • The expiration date
  • The full cardholder’s name.

How Does a Credit Card Invoice Work?

Now that we know what a credit card invoice is, let’s look at how it works.

When you provide goods or services to a client, you will send them an invoice for the total amount due. This invoice will include a section for credit card payments. The credit card information that you will need from your client includes the credit card number, CCV number, and expiration date.

Once you have this information, you can process the payment through your credit card processor. The funds will then be deposited into your account, minus any credit card fees.

Pros and Cons of Credit Card Invoice

The preference for using debit and credit cards to make payments increases every year. That’s why many businesses are trying to incorporate credit card invoicing into their payment processing strategy. 

That’s why it’s also important to weigh the benefits and drawbacks of offering this type of payment method. With that said, the following are some notable pros and cons of credit card invoicing:

Pros

  • Convenience: Credit card invoice gives convenience to both you and your customers. The entire transaction is entirely customer-controlled. Meanwhile, you also benefit from getting paid digitally and on time. 
  • Increase Customer Pool: Credit card invoicing allows you to tap into this market for customers who prefer credit cards over cash payments. This is especially beneficial if there isn’t an ATM nearby. 
  • Upsurge in Revenue: By accepting credit card payments, you will increase the number of potential customers that you get. In turn, this will also lead to an increase in revenue for your business.

Cons 

  • Fees: One major downside is that credit card companies will charge a fee for processing credit card payments. The fees can range anywhere from 0.25% to 0.30% of the total transaction.
  • Security Risk: Another thing to consider is that credit card information is much more sensitive than other types of payment information. If this information falls into the wrong hands, it could lead to fraud and identity theft. 
  • Chargebacks: A chargeback happens when a credit card company reverses a transaction because the customer is unhappy with the purchase. This puts the burden on you to prove that the customer received the goods or services they paid for. If you can’t do this, you will be responsible for paying the chargeback fee, which is typically around $20.

Average Credit Card Processing Fees

Credit card processing fees will depend on a lot of factors. However, a small business may pay anywhere from 1.4% to 4% of the total amount as processing fees.

According to consumer finance website ValuePenguin, the average processing feed per debit/credit card are as follows:

  • MasterCard: 1.55% to 2.6%
  • Visa: 1.4% to 2.4%
  • American Express: 2.5% to 3.5%
  • Discover: 1.5% to 2.3%

ReliaBills Also Accepts Credit Card Payment

When you thought ReliaBills couldn’t get any more convenient, our system also accepts credit card payments! In addition, our invoicing system accesses electronic payments that will help you get paid faster. 

We understand that not everyone is comfortable with making online payments. So we’ve made it possible for you to offer multiple payment methods for your valued customers. This includes credit card payments.

Once your customers have enrolled in AutoPay, you can automatically bill and collect payment from their debit or credit cards. So not only are you providing absolute convenience to your customers, but you’re also doing yourself a favor by not having to chase payments every month.

ReliaBills Plus

Before you get access to electronic payment and other amazing perks about ReliaBills, you must upgrade your account to ReliaBills PLUS (our premium version). At $24.95 per month, you can enjoy all our service offerings with an unlimited number of users, customers, invoices, and emails.

Payment Processing Service Fees

There will be zero charges for checking payments or recording cash. However, if your customers pay via debit/credit card, our system will charge a reasonable 3% + $0.30 per transaction. For American Express cardholders, the processing fee would be 4% + $0.30. 

Keep in mind that you have full control over which cards you want to accept payments. That means if you don’t want to accept American Express due to the slightly higher processing fee, you can set it up as such in the settings.

If your customers prefer to pay via direct bank debit (ACH or eCheck), charges will be 0.25% + $0.99 for each transaction. Our system will also bill the monthly license fee to any card that you will have on file. Transactions will then be deposited directly to your bank account, minus the processing fee.

Additional Fees

We also charge additional fees for the following:

  • Chargeback fees – $20.00
  • eCheck reversal – $20.00
  • High Ticket Fee – 0.15% of gross sales amount for all card transactions over $1,000.00.
  • International Card Fee – 1.45% of gross sales for all card transactions processed from a non-US bank card.
  • Paper Invoicing/Statement Delivery – $0.70/piece + first-class postage stamps
  • SMS fee – $0.05 per sent message.

Additional fees are not fun. But our rates are still very competitive when you compare them to other credit card processors. For more information about our pricing schedule, click here.

At ReliaBills, we want you to experience nothing but convenience, satisfaction, and peace of mind. So if you’re interested, give ReliaBills a try today!

Wrapping Up

In this day and age, accepting debit and credit card payments are essential for businesses. If you’re not doing it yet, now is the time to start. And what better way to do it than with ReliaBills? You can easily send credit card invoices to your clients with our invoicing system. Try ReliaBills now!

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