payment options for child care centers

The Pros & Cons of Different Payment Methods for Child Care Centers

Payment can be a hot button issue when it comes to child care. Whether it’s chasing payments, endless trips to the bank or juggling many different forms of payment, collecting and managing money is one of the biggest administrative headaches that owners and directors face.

If you are currently providing child care services, then you should have figured out a payment system of some sort by now— but is it truly the best option for your business? Just because it works does not mean it works for you as best it can.

In this article, we’ll take a detailed look at the advantages and disadvantages for each of the most common payment methods for preschools. Whether you’re looking for a new solution or curious about whether you’re truly using the best one, read on to make sure you understand all of the pros and cons for each method.

Cash

cash payments for child care centers advantages and disadvantages

Some businesses like to keep things simple and believe that cash is king. But is it really? While cash may seem like the most straightforward payment method on paper (no pun intended), it can actually be one of the more complicated options when considering all of its implications.

Pros

  • Funds are received instantly.
  • No additional fees.

Cons

  • Easy to misplace.
  • More prone to theft, and there is nothing you can do if this happens.
  • Inconvenient for parents because they need to make a trip to the bank.
  • Requires investment in a high quality safe for storage.
  • Need to visit the bank to deposit into your account.
  • Requires counting.
  • Need to ensure you always have change on hand.
  • Keeping accurate records can be complicated.
  • Difficult to detect counterfeit money.
  • Lack of recorded activity may make you more likely to be audited.

Checks

check payments advantages and disadvantages for preschools

For many child care providers, checks have been the preferred payment method for quite some time. They offer a balance between the conveniences and security of banking with the tactile feeling and simplicity of paper.

Despite their popularity, checks are not without their flaws. Although they can be more convenient than cash for both providers and customers, there are still inconveniences and things that can go wrong with this option.

Pros

  • Minimal (or zero) processing fees depending on your account type.
  • Can be postdated and submitted at once for an extended period of time (e.g. a semester).
  • Depending on your bank, you may be able to deposit it electronically through an app.

Cons

  • Easy to misplace.
  • May need to visit the bank to deposit into your account.
  • Parents need to remember to write a check or have their checkbook on hand.
  • Can bounce, which will take a few days to detect and may result in you being charged a fee.
  • Customers can stop payment any time after a check is written before you deposit it.
  • With digital payments becoming more common, younger parents may not even have checks.

Credit or Debit Cards

credit and debit card payments for child care centers advantages and disadvantages

Most businesses tend to offer credit and debit card payment options due to the convenience it provides for its customers, although many child care centers have been resistant to add this method. This provides those willing to go digital with payments an easy way to stand out from the competition and add value to their customers.

Some providers are hesitant to add these payment methods due to things like transaction fees or upfront work to set it up, but many consider this an investment in making things more convenient for their customers. Additionally, there are also advantages for business owners when compared to older payment methods.

Pros

  • One of the most common and preferred payment methods.
  • Parents can earn rewards points that their credit card offers.
  • Parents can pay tuition even if there is not enough money in their bank account at the time of payment.
  • Fraudulent or incorrect information can be detected quickly.
  • No need to visit the bank.
  • Payments will not bounce due to insufficient funds (i.e. checks).
  • Easy to process payments on the spot since parents are likely to have their credit or debit card when they are at your center.
  • Can be integrated with bookkeeping software for easier accounting.

Cons

  • There is a processing fee per transaction that will either be paid by you or passed along to your customers.
  • You may need to purchase physical equipment (sometimes these can be free but with higher transaction fees).
  • Need to take precautions to keep credit/debit information secure.

Online Payments

online payments for child care centers advantages and disadvantages

Online payments is a fairly broad category that includes many different ways of transferring money over the internet, such as e-transfers, PayPal, credit card, direct debit and so on. With the convenience of paying any time and anywhere, centers are increasingly adding or switching to online payments to make the process more convenient for their customers and themselves.

Pros

  • Can be paid any time.
  • Payments can be made from home or on the go.
  • Can be set up to be paid automatically.
  • One of the most common and preferred payment methods.
  • Can be managed through a child care app that you use for other aspects of your business (e.g. HiMama).
  • Parents can earn rewards points that their credit card provides.
  • Payments will not bounce due to insufficient funds (i.e. checks).
  • Fraudulent or incorrect information can be detected quickly.
  • No need to visit the bank.

Cons

  • There is a processing fee per transaction that will either be paid by you or passed along to your customers.
  • Need to ensure you are following proper security protocols to protect customer information.
  • Less tech-savvy parents may be resistant to using this method.

Interested in adding online payments to your child care center? Fill out the form below and discover how HiMama can delight your customers with online payments, daily reports, and improved communications today!

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pros and cons of different payment methods for child care centers

Michael Keshen

Michael is the Content Manager at HiMama, with over 7 years of online content publishing experience. He is the current editor in chief for HiMama's early childhood education blog and ECE Weekly newsletter. When not developing content for early childhood professionals, he can usually be found out and about with his wife and daughter exploring all that Toronto has to offer, or playing music with his karaoke band.

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