Accepting online payments is a standard part of selling local food online. Credit cards, ACH, e-transfers, Venmo–you name it, you probably accept it. Online payments are the ultimate convenience for your customers. Most people don’t carry cash; so having the ability to pay by card online and just pick up their orders can go a long way. Beyond your direct-to-consumer customers, accepting large sums from wholesale customers can be pricey, too!
Staying flexible is the name of the game. Accepting online payments can increase your customer retention and help ensure sales.
But online payments usually cost your farm extra. Are there ways to make this more efficient and affordable? In this article, we explore three hacks for saving money while making money online.
If you haven’t heard of ACH before, ACH stands for Automated Clearing House and is similar to a wire transfer. ACH payments are particularly popular with wholesale transactions where the order values are too high to pay with a credit card.
ACH works like any other payment method on your online store. When customers go to check out, they select ACH as their payment method and are prompted to add their bank details, including their name, account number, and routing number. Before placing their order, they’ll see the Authorization Mandate, which gives you, the supplier, permission to debit their account for the total order amount. The money will be sent from their bank account to yours when the order is placed.
Similar to credit card payments, customers can grant you permanent preauthorization to debit their bank account by selecting to save their bank details to their account for future use.
The best part of ACH is that it costs significantly less than credit card fees. With a credit card, you can expect to pay around 2.9% + $0.30 per transaction. With ACH, you only pay 1.0% + $0.00 for each transaction. All ACH fees are capped at $50. This is especially important if you’re doing large-volume wholesale transactions.
Let’s go through an example:
ABC Grocery Co orders $15,000 of tomatoes from Tom’s Tomato Farm. The fee to accept the $15,000 would only be 0.33%. Compared to a credit card fee of 2.9%, Tom’s Tomato Farm would save $385!
We all know credit card fees add up. If you prefer to push your customers to use a different payment method, consider adding a fee for your credit card payments. This way, customers who prefer to use their credit card have the option available, but you, as the farm, are not paying for it.
With Local Line, the sales software built for farms, you can add an Optional Fee for any payment method you create, whether that’s a credit card, e-transfer, Venmo–you name it. The fee can be added as a dollar amount or as a percentage. Percentages will be calculated on the order after tax has been incorporated.
The optional fee can be found under the payment method settings while creating new payment methods.
At Local Line, we want to help independent family farms stay profitable and grow their businesses. In 2022, we launched LocalPay, Local Line’s payment gateway with lower credit card transaction fees than most other payment platforms.
With LocalPay, you can accept credit card payments, similar to Stripe or Square. Most credit card transaction fees are standard the 2.9% + $0.30. With LocalPay, depending on your Local Line plan, you can get increasingly better rates. For example, with our Premium plan, pay only 2.7% + $0.30 per transaction.
Making the switch is easy. Inside Local Line, you can set up different farm payment options, including cash, e-transfer, Venmo, and more. To connect with LocalPay, select Payment Gateway Set Up in the payments tab and then LocalPay. This will prompt you through the steps to setting up. Before you know it, you can accept ACH, order a new farm point-of-sale system, and save money on credit card fees! LocalPay is only available for Local Line users.
Implementing these tactics to your online payments can save you tons in payment fees. Selling online should be profitable – not the other way around. Local Line’s farm e-commerce software is built to help you grow.
In addition to the above ways to save money, Local Line’s pricing is fixed; meaning no matter how much you sell – you pay the same month after month. Addition sales fees (usually around 2-3%) quickly add up. With our transparent pricing, you pay what you see.
Stop losing your money to high fees. No matter your business model or what you sell, Local Line has the features and workflows your farm or food hub needs. Pick the sales software that will grow with you.
