How to choose a payment app for your service business

You just finished swapping a water heater. The homeowner wants to pay by card, it's 6:40 p.m., and the basement has one bar of signal. What happens next depends on the payment app you picked. A good one takes the payment in seconds, sends a receipt, puts the money in your bank and matches it to the invoice. A bad one leaves you chasing a check next week.

This guide walks through how to choose a payment app for a plumbing, HVAC, electrical, roofing, landscaping or cleaning business: how pricing models work, where fees hide, and what to test before you move every job over.

Start with how your customers actually pay

Before you look at any app, write down how money comes in today. Payment needs differ a lot by trade, and the app that suits a cleaning company can be a poor fit for a roofer.

Circle the rows that describe your business. Your must-haves come from there, not from a vendor's feature page.

The three places a payment app can live

You'll find payments in three kinds of software. Decide where payments should live first, then pick the provider.

There's no single right answer. The rule is to avoid a setup where a tech collects in one app, the office invoices in another and your bookkeeper matches them by hand at month end. For the bigger picture, see all-in-one platform or best-of-breed tools.

How payment pricing generally works

Processors price in a handful of ways. Names vary, but most plans are one of these or a mix. Pricing and plan names change often, so use this as a map of what to ask, not a price list.

• Flat rate. One percentage per transaction, often plus a small fixed fee, sometimes different for tapped, keyed-in and online payments. Easy to understand and easy to compare.
• Interchange-plus. You pay the card networks' underlying cost (interchange, which varies by card type) plus a stated markup. Harder to read, but the markup is visible, which helps at higher volumes.
• Tiered. Transactions are sorted into buckets like "qualified" and "non-qualified" at different rates. Ask exactly what puts a payment in each bucket, because that drives your real cost.
• Subscription. A monthly fee in exchange for lower per-transaction pricing.
• Bundled with software. Some field service tools include or require their own payments. Ask whether you can bring your own processor and what changes if you do.

Then there are the fees that rarely appear on a pricing page: chargeback fees, instant payout fees, bank transfer fees, monthly minimums, PCI compliance fees, statement fees, hardware costs and early termination fees. Ask about each one by name.

Work out your effective rate

The only number that compares providers fairly is your effective rate:

Effective rate = total fees paid in a month ÷ total payments processed that month

Ask each vendor to price your last three months of real transactions and tell you the effective rate. If they won't, that tells you something.

Keyed-in cards (typed into the app instead of tapped or inserted) often cost more and carry more fraud risk. If your techs key in most payments today, fixing that habit can matter as much as the provider you choose.

Big tickets, deposits and holds

This is where trades differ most from retail shops. A drain clearing is routine. A full roof or a new heat pump is a much larger payment, and processors may review or hold unusually large payments, especially on newer accounts.

Before your first big job on a new account, ask:

• Is there a per-transaction or monthly volume limit, and how do I raise it?
• What triggers a review or a hold on funds, and how long do holds usually last?
• Can I take a deposit now and charge the balance later against the same card?
• How do I take progress payments on a multi-day job?
• Can customers pay large balances by bank transfer, and what does that cost me?
• If a customer uses third-party financing, how does that money reach me and how does it show on the invoice?

Tell your processor your typical and largest ticket sizes when you sign up. An account set up for small service calls can get flagged the first time a five-figure payment comes through.

Surcharges, convenience fees and cash discounts

Many owners want to pass card costs on to customers. Rules on surcharging, convenience fees and cash discount programs differ by card network and by state, and they change. Before you add any fee to a customer's bill, confirm the current rules with your processor and talk to your accountant or attorney. If you're not sure, build card costs into your prices instead. Our guide to credit card processing fees goes deeper.

Chargebacks: protect yourself before the job

A chargeback is when a customer disputes a payment with their card issuer. In home services the usual story is "the work wasn't done as described" or "I didn't agree to that amount." You win disputes with records you collect during the job, not after.

• A written estimate or work order the customer approved before work started
• Photos before and after, stored with the job
• Change orders approved in writing (a signature or a text reply is stronger than a verbal OK)
• A completion signature or approval on the invoice
• A clear line-item description of the work, not just "service"
• Your refund and warranty terms shown on the estimate or invoice
• A receipt sent by text or email with the job address on it

Ask each vendor how disputes work: how you're notified, how long you have to respond, whether you can upload photos and signatures from the job, and whether there's a fee even when you win.

Payouts and bookkeeping

A payment isn't finished until the money is in your bank and matched to the invoice. Ask:

• How long until payments land in my bank, and is it different on weekends and holidays?
• Is there an instant or same-day payout option, and what does it cost?
• Are deposits paid gross (fees billed monthly) or net (fees taken out of each deposit)? Net deposits are harder to match to invoices.
• Does the app sync to my accounting software, with fees, tips and refunds as separate lines?

Your bookkeeper will thank you for a clean sync. More in bookkeeping basics for contractors.

Field realities: test in the worst conditions

Payment demos happen in bright offices with good Wi-Fi. Your techs work in crawl spaces, attics, rooftops and backyards.

• Weak signal. Ask whether the app can store a payment offline and process it later, and what happens if that card declines once you're back in range.
• Tap to pay on a phone. Many providers now let a phone accept contactless cards without a separate reader. Check which phones are supported and whether your techs' phones qualify.
• Readers. If you need one, how is it charged, and what happens when it's lost or dropped off a ladder?
• Tech permissions. Can you stop techs from issuing refunds or changing prices without approval?
• Tips. Cleaning crews and some residential teams get tipped. Can the customer add a tip, and does it report cleanly for payroll?

Questions to ask every vendor

• What is my total effective rate on my last three months of transactions, including every fee?
• Which rates apply to tapped, inserted, keyed-in, online and bank transfer payments?
• Is there a contract term, auto-renewal or early termination fee?
• Is hardware bought, leased or included, and who owns it if I leave?
• Are there monthly minimums, PCI fees or statement fees?
• What are my account limits, and what triggers a hold?
• How are chargebacks handled, and what do they cost?
• How fast are payouts, and are they gross or net?
• Can I save cards on file with customer authorization and charge them later?
• Can I take deposits, partial payments and recurring payments?
• Does it connect to my scheduling or field service software and my accounting software?
• Can I export my transaction and customer data if I leave?
• What support can I reach on a Saturday in July or a Monday in January?

Get the answers in writing. Pricing pages change, and a sales rep's promise only helps you if it's in your agreement.

Run a real test before you switch

Once you have a favorite, test it with your own card before you move every job:

1. Take a $1 payment by tap, then by keying in the card, then by sending a payment link.
2. Refund one and see how long the refund takes to show.
3. Take a deposit, then charge the balance.
4. Save a card on file and charge it the next day.
5. Read every receipt as your customer would. Is your business name clear? Is the job address there? Is there a way to contact you?
6. Wait for the payout and check the amount against what you expected.
7. Check that everything landed correctly in your accounting software.

When you switch, don't close the old account on day one. Refunds and disputes on older payments may still run through it, so ask your old provider how they handle those after you leave. Our guide to switching software without losing a week covers the rest of the move.

The short version

Start from how your customers pay, decide where payments should live, compare providers on effective rate rather than headline rate, ask about limits and holds before your first big job, collect dispute-proof records on every job, and test in a real basement before you commit. If you want to see how we think about collecting on site and online as part of the whole job, Zome's payments page lays it out. Whatever you choose, pick the app your techs will actually use at 7 p.m. in a wet basement.