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Credit Card Payments

samgloversamglover Minneapolis, MN Admin
Graham asked me about taking credit card payments. I have been using PayPal
for this for a few years, now.

PayPal charges you based on your monthly income. Here is PayPal's merchant
fee chart:

[image:
?ui=2&view=att&th=1268f4c221fa6af7&attid=0.1&disp=attd&realattid=ii_1268f4c221fa6af7&zw]

I have wondered about getting an actual merchant account, but my
understanding is that most merchant accounts have a monthly fee and still
charge 3% interest. Other than having a card-swiper in my office, I can't
figure out what advantages there are to a merchant account. I guess they
also deposit directly to your bank account, so you could potentially take
credit cards for trust account deposits, too.
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Comments

  • I've used PayPal's free merchant account for the past four years now as
    well.  It's worked great for me.  My online clients trust it. I've heard
    that Google Shopping Cart works similarly with lower per-transactions
    fees.

    That said, I don't have a trust account in my practice and do not take
    retainers or ever hold client's funds in trust. There are some
    malpractice concerns with having clients pay by PayPal and then routing
    that money to your trust account vs operating account, making sure that
    the per transaction fee is not taken out of their funds to be held in
    trust but instead out of your operating account.  I have worked with
    attorneys who are using different third party credit card processing
    services.  Law Charge is one option that is a merchant account service
    that was designed for attorneys so it has the IOLTA and trust accounting
    compliance.  I think they may be less expensive than your bank's
    merchant services, but all of them charge an annual or monthly fee in
    addition to a per-transaction fee.  I'd recommend shopping around
    carefully before offering credit card payments and considering if you
    can use PayPal safely based on your practice and the state bar's
    requirements for trust accounting.

    -Steph

    --
    Stephanie L. Kimbro, Esq., M.A., J.D.
    Kimbro Legal Services, LLC
    http://www.kimbrolaw.com - A NC Virtual Law Office
    http://www.virtuallawpractice.org - Virtual Law Practice Blog
  • I agree with Steph that there are a number of issues to consider when
    taking credit card payments and that you should shop around. I also
    recommend a company called Capital Payments since they work a lot with
    lawyers and understand the trust/IOLTA account issues, and they have
    been known to save their clients significant money on their fees.

    Contact information for Capital Payments is below. If you contact them, let them know I sent you:

    ?Natalie Silva

    Vice president, Marketing and Program Management

    Capital Payments LLC

    225 Broadhollow Road

    Suite 122W

    Melville, NY 11747

     (631) 719-8657

     (877) 227-5087

    Fax:     (888) 673-0243

    nsi...@capitalpayments.com

    http://www.capitalpayments.com

    Allison C. Shields, Esq.
  • samgloversamglover Minneapolis, MN Admin
    Since I almost always charge flat fees, I don't use the trust account for
    most things. If I did need to take credit cards for things for the trust
    account, I suppose I would want to go with a merchant service that could
    draw fees from a separate account.
  • Thanks all.

    Silly me--I hadn't even thought about utilizing PayPal for that purpose. I
    was just thinking about typical merchant services. I did find a nice
    breakdown of some of the merchant services out there at Top 10
    Reviews<http://credit-card-processing-.....views.com/>,
    if anyone is interested.

    Do we have an ethics maven of some sort on this mailing list who might be
    able to shed some light on how to safely set up credit card payments to
    trust accounts? And to circumvent that problem, couldn't a person just set
    up two different PayPal accounts--one for the operating expenses and one for
    the trust?

    Graham Martin
    Martin Legal Services, LLC
  • Graham:

    The merchant services provider you use should be able to help you with that
    - remember that the rules are different in each jurisdiction. As for setting
    up two PayPal accounts, I'm not sure that would work unless you could get
    them to deduct the fees from the operating account rather than the trust
    account when the client pays you - if PayPal is even set up for that.

    Allison

    Allison C. Shields, Esq.
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