The Value of Accepting Credit Card Payments from Homeowners

By Satta Sarmah Hightower 07-15-2021
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Whether it's a minor roof repair or complete replacement, home improvement projects can be a big expense for homeowners. That's why it's so important for contractors to consider accepting credit card payments in addition to other flexible payment options they may offer.

According to recent Federal Reserve data, 29% of consumers prefer to pay via credit card, compared with 23% who prefer to pay with cash. As online shopping continues to dominate numerous industries, consumers have become more comfortable with card and digital payments. About 29% of homeowners who have done home renovations in the last year used credit cards to pay for those projects.

Adam Moss, vice president of Moss Roofing, says accepting credit card payments can help your business better serve customers and close more deals. Moss's company, which serves customers in the Indianapolis area, has seen several positive business outcomes after accepting credit cards as a payment option.

Transforming a Family-Owned Business

Adam's parents, Beverly and Steve, started Moss Roofing in 1991. Steve was a former siding and window applicator who decided to go out on his own. Moss says his parents operated a predominately cash- and check-based business for years before he began working at the company in 2016.

"There was a real old-school mentality that my parents had, especially regarding financing. They were raised in a generation where credit cards weren't the norm and financing wasn't the norm," he says.

Moss began working at the company right after college and fell in love with contracting. The shift to flexible payments started after a customer emailed to ask about financing options. Moss approached his father, who said the business only accepted checks. Moss then decided to explore offering flexible payment options to customers, especially since the company installs high-quality roofing systems that can cost $15,000–$20,000.

"It was just really obvious to me right away that we have to make what we do affordable," he says. "Most people aren't budgeting monthly for a roof replacement, so when that time comes, it's normally a surprise for people that the roof is at the end of its life. It's unfortunate because not only is it a significantly impactful expense, but it's also not planned."

Moss Roofing began offering financing options in 2017, but Moss says it took a full two years for the company to fine-tune this process and integrate financing into how it does business.

"There's definitely a learning curve, not only for us as the owners of the business but for the sales team and the office staff," he says. Here are some recommendations from Moss to help contractors who are considering accepting credit card payments.

Providing a Better Payment Experience for Customers

The company offers customers flexible financing terms based on their individual needs and budget. Moss says his sales team usually leads these conversations with customers, since they are typically more comfortable navigating this topic than project managers on the jobsite. His company has also invested in online accounting and invoicing software to accept credit card payments from customers. Moss says the ROI has been immediate.

According to Moss, the use of flexible payment options such as accepting credit cards has led to tighter receivables because their closing percentage is higher. All of their operations have increased as a $15,000–$20,000 roof replacement or $20,000–$25,000 siding replacement becomes a $250 or $300 monthly payment.

Customers have also responded positively to the change.

"It's a relief for most homeowners to know they're not going to have to go to their bank and try to figure out what loan and what APR they're going to get," Moss says. "It's a relief to know they're not going to have to go out and get that amount of money by either tapping into their 401(k) or into an account they had allocated for something else within their budget."

Moss says that other contractors who want to begin accepting credit card payments should remember to consider credit card processing fees and the technology investments they'll need to make. He recommends building these costs into the operating expenses budget.

"One of the biggest recommendations I have for any contractor is that they have to know their numbers," he says. "They need to know what their margins are and what their overhead is and look at all of that to determine what their price is."

Once contractors have a good handle on their numbers, they'll likely be able to offer customers the flexibility they need to pay for larger projects.

"There's absolutely no reason any contractor in the United States can't find a payment option for a customer that suits their budget," Moss says. "You will be shocked once you start having those proactive [financing] conversations . . . because it could be the difference between getting the job and not getting the job."

Want to offer your customers flexible payment options? Consider GAF SmartMoney*, a complete paperless payment solution.

*GAF SmartMoney is offered and serviced by Pazyer, LLC, d/b/a Payzer, which is not affiliated with GAF and financed by lenders which are also not affiliated with GAF.

Satta Sarmah Hightower is a freelance writer who covers business, healthcare and technology topics for a wide range of brands and publications. A former journalist, Satta holds a bachelor's degree in journalism from Boston University and a master's degree in journalism from Northwestern University's Medill School.
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