Swipe, Tap, Done: Optimizing Payments for Your Contracting Business

Getting paid for the service work your technicians perform in the field should be easy, but the traditional practice of accepting a customer’s check or cash may not be the most reliable form of payment, especially when the check bounces or cash gets lost. 

Digital payment methods, on the other hand, help contractors reduce bouncebacks and get paid faster, says Ammar Ahmed, Group Project Manager at ServiceTitan. In the next episode of the Mastering ServiceTitan podcast, Ahmed unpacks the surprisingly high-stakes world of payments in the trades.

Learn how to optimize your payment strategy without overcomplicating the fieldwork with practical tips for training techs, avoiding surcharging risks, and leveraging tools like Tap to Pay and Pay by Bank.

The evolution of contractor payment methods 

Having worked in the FinTech industry for 21 years, Ahmed says the world of contractor payments has evolved significantly. 

In the late 1990s and early 2000s, customers mostly used cash, checks, or credit cards. Then, with the rise of the internet and online banking, customers started using digital wallets, such as PayPal Wallet, Google Wallet, Samsung Wallet, and Apple Wallet.

The next evolution resulted in Apple Pay and Google Pay with expanded mobile payment capabilities, then Tap to Pay with an NFC (Near Field Communication)-enabled card or device on a payment terminal. Today, customers use their smartphones to make and receive mobile payments.

“You do everything on your phone as a consumer,” Ahmed says. “You pay through your phone, you listen to music through your phone, you can watch movies through your phone. I think that's the big evolutionary shift that's occurred within payments. And it's only going to get more innovative.”

ServiceTitan’s goal is to do what’s best for its customers and meet them where they want to be with newer payment technology tools, such as Tap to Pay and Pay by Bank. Ahmed says the fact that a software company like ServiceTitan has enabled these tools for customers is a huge deal.

“It just drives home the point that we are trying to build faster, seamless, and embedded payment solutions to not only speed up the checkout process but also help contractors and techs get paid faster and increase revenue overall,” Ahmed says.

The real value of digital payment methods for contractors

Contracting businesses need to get paid, but technicians are mostly focused on the job and providing the best possible service.

“They don't want to think about ‘How do I get paid? Is this the right channel for me to accept payments? Is this check going to bounce? If I take this cash and put it in my pocket, is the cash going to fall out while I'm getting in and out of my truck?’” Ahmed says. 

“What technicians should be thinking about payments, in general, is, ‘What is the most seamless way for us to get in, get out, and get paid faster?’” he adds.

With ServiceTitan Payment Processing, contractors can use automated tools to optimize the process, get paid faster, and reduce the number of bouncebacks due to insufficient funds. 

“ServiceTitan Payments can really help businesses evolve and help them reduce their overall operating costs,” Ahmed says.

Digital payment methods also minimize risks and increase security against fraudulent practices. For instance, you can accept a digital payment as a “card-present” transaction, which requires a physical credit card from the cardholder to be present for payment. These types of transactions are considered more secure and come with a lower cost interchange (cost of processing transaction).

With ServiceTitan’s Tap to Pay, techs use facial recognition to unlock their smartphone or other mobile device and the customer taps their debit or credit card on the device to make payment. So, the technician’s cell phone or mobile tablet — which must be NFC-enabled — basically becomes a card reader. And just like the “card-present” transaction, the Tap to Pay is more secure and costs less to process.

In comparison, a “card-not-present” transaction, where the customer simply inputs numbers from a credit card online, is less secure and costs more to process.

Ahmed says ServiceTitan recommends using “card-present” transactions for contractors trying to optimize their payments process.

“With ‘card-present’ transactions, you know immediately that the credit card has a balance to actually make the payment, so you basically get paid faster. You have instant authorization. Then, you also save money from an interchange perspective,” Ahmed says.

If the customer doesn’t have a physical credit card to Tap to Pay on-site, the tech can send them a payment link through the customer portal and they can send payment later through an ACH transaction or credit card. This transaction would be considered ‘card-not-present.’

ServiceTitan also offers Pay by Bank, which provides an instant connection to the customer’s bank account. Instead of manually entering their routing and accounting information, the customer enters their username and password for their bank, and the system automatically connects the account and checks the balance to make sure they have enough funds to cover the payment.

“Try to have your payment mix leaning more towards ‘card-present’ transactions than ‘card-not-present.’ And that will actually have a significant impact on your overall optimization and interchange costs,” Ahmed says.

Why checks are riskier (and costlier) than you think

While some customers, especially an older demographic, may prefer to pay by check, this form of payment poses a few risks to your business. First, you’ll need to wait to get paid until the check clears. Secondly, a check can bounce due to insufficient funds, and a bounced check can take up to 30 days to resolve and cost your business up to $75 in fees charged by your bank.

To avoid this issue, Ahmed suggests training techs to approach customers for payment by asking if they would like to pay by credit card or debit. This signals to the customer that these are the preferred methods of payment.

“You want to change the preference model from a language perspective in order to drive more ‘card-present’ transactions,” he says.

“The Federal Reserve did a study in 2024, and 70% of transactions are basically credit and debit. And then the next majority is mobile payments,” Ahmed says. “I always tend to say digital is safer because you have protection as a business with digital payments. As a payments industry expert, I’m 100% bought in all the digital payment models.”

How to use Pricebook to recoup processing fees

Contractors often worry about paying too much in credit-card processing fees and they may decide to pass those fees onto the customer. But if you’re going to add a surcharge to your job fees, Ahmed says there are a few regulations you need to know about:

• 4 states don’t allow surcharging (Maine, Massachusetts, Connecticut, and Puerto Rico)

• 15 states allow surcharging with certain contingencies (Illinois, Colorado, Georgia, Kansas, Texas, Nevada, New York, South Dakota, New Jersey, Minnesota, California, Florida, Oklahoma, Michigan, and Montana)

• The cap on surcharging is 3%.

• You can't apply a surcharge on debit cards (so, if the customer uses a debit card as credit and you apply a surcharge, you’re in violation).

• If you do surcharge, you must provide signage or messaging to the customer before they pay.

• Finally, consumers do not like paying surcharges.

So, how do you reduce your business’s payment processing costs without necessarily applying a surcharge? 

“We have this amazing tool called ServiceTitan Pricebook Pro,” Ahmed says of one of ServiceTitan’s most popular features. “The Pricebook includes all of the prices of the services and products you offer. There’s a functionality within the Pricebook where you can actually add a 3% fee to any card transactions.”

Then, when the tech presents the final bill to the customer, they can offer a 3% discount if the customer chooses Pay by Bank or ACH (Automated Clearing House). That way, the customer pays less and your business saves money on credit-card processing fees.

“The conversation changes between the tech and the consumer of, ‘Oh, you're giving me a discount’ versus, ‘Oh, you're penalizing me for using a credit card,’” Ahmed says. “This is an easy way to reduce your overall cost while improving your bottom line revenue.” 

ServiceTitan’s Tap to Pay also eliminates the need for techs to haul card readers around on their trucks, since the tech’s cell phone essentially becomes a card reader.

“More and more people are moving more towards mobile transactions than they are towards physical cards. It's just easier, right? You always have your phone on you. You may not always have your wallet or your purse on you.”

In addition, ServiceTitan is reducing the number of steps required when techs need to send a payment link for customers to pay online later. The upgrade will feature a QR code the consumer can scan, then go directly to the payment page.   

Other new features on the horizon include enabling Apple Pay and Google Pay within ServiceTitan’s customer portal, as well as the ability to collect deposits during job phases.

>>Listen to the full podcast on-demand to learn more about ServiceTitan Payment Processing features. 

You can find this interview and many more by subscribing to Mastering ServiceTitan on Apple Podcasts, on Spotify, or here. 

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