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5 Things Self-Storage Operators Need to Know About Taking Payments


By Preston Glenn

A self-storage operation is a big responsibility requiring more management than the average person realizes. Self-storage owners face many of the same challenges as those of other businesses: managing staff, customer turnover, marketing and advertising, and day-to-day site maintenance. One area in which they often have questions is customer payments.

With the multitude of payment types now available and widening consumer demand, it’s more important than ever to understand the complexities of credit cards, recurring payments and e-checks. Here are five things you should know about accepting various payment methods.

What’s the difference between a one-time and recurring payment?

A one-time payment is exactly that: a payment authorized to be made a single time. It’s the kind of payment you make when you buy groceries, clothes and so forth. It’s possible to accept one-time payments in self-storage. While it allows the customer to pay with a different method each month if he desires, it also creates a lot of overhead for you and your staff.

A recurring payment is authorized to occur on a repeating basis—for a set amount, on a set schedule, against the same payment method. It’s ideal for a monthly bill. The customer must agree to have the payment withdrawn or charged regularly, but once he has, it’s largely a “set and forget” situation. Because there are no reminders necessary to take these payments, and no concern about missed payments, they’re ideal for businesses like self-storage.

Are there alternatives to credit cards I should consider?

There are many ways to pay for products and services besides a credit card. In addition to traditional options such as paper checks and cash, there are alternative payment types. But many of them, such as Bitcoin and mobile payments (Apple Pay, Google Wallet, etc.), aren’t the best fit for the self-storage industry. Rather, operators should focus on those that allow for recurring payments.

An ideal alternative for self-storage is an electronic bank-account debit, also known as an e-check or automated clearing house (ACH) payment. This allows offers the convenience of recurring payments and has lower processing fees than credit cards.

What fees are associated with accepting credit cards and e-check/ACH payments?

Credit cards are relatively painless way for a customer to pay for his storage rental, but that ease of use comes at a price for the facility operator. How much your business will pay to process credit card transactions depends on several variables, such as which card is used and your agreement with your credit card processor. Rates will likely include:

  • The interchange rate from the credit card company
  • A flat per-transaction fee
  • Assessment fees
  • Processing costs
  • Payment card industry fees from your processor

You also have to consider the cost and any monthly fees for your card readers.

When looking for a merchant-services provider, know how many transactions you expect to complete in a typical month as well as the average cost of each transaction. This will guide you to the best account type with the most appropriate fees for your business. E-checks, for example, usually have a low flat fee, typically between 25 cents 55 cents per transaction. Processors may also charge a daily processing or monthly fee, which will affect the per-transaction cost.

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