Bank Payments for 1% Per Transaction by Wave
April 22, 2018
Wave allows you to accept Bank Payments for only 1% per transaction. So what’s the catch? There is none— create a free account, populate your banking data and you’re ready to start accepting bank payments from clients.
Wave, a fintech company offers a suite of financial services and free accounting software. Wave allows you to accept payments from your customer’s bank account via a new service called Bank Payments. Your bank account receives the funds electronically in 4 to 7 days.
Because this is essentially a wire service, there are no bounced checks to worry about. Funds move electronically from your client’s bank to your account.
Wave does offer traditional credit card transactions (Payments by Wave), but Bank Payments will save you 1.9% per transaction. Saving 1.9% might not seem like a lot, but if you’re sending large invoices, the savings over a credit card can be substantial.
Take for example a $5,000 invoice. If your paying 2.9% (plus .30 per transaction), you’re looking at $145 in bank fees. The same transaction using Wave’s transfer service will cost you $50. A savings of almost $100!
Checks Versus Transfers
According to Wave, only 15% of purchases are made by check.*
“Wave’s bank payments option is like paying by check, but without the hassle for you and your customers. Your customers follow a few quick and easy steps online to pay your invoices, and Wave does the rest. No more waiting for a check in the mail or running around collecting payments in person. You’ll get paid fast and save yourself and your customers time.”
Something we’ve run into the past is checks written out to a individual’s name and numerous misspellings of our LLC. When this happens we generally have two options; shred the check and ask for a new one or send the client an invoice that can be paid by credit card.
Recently we waited weeks for a check from a client who has done business with us for over 10 years. The check was deposited and several days later we received an email it bounced—not a good feeling. Even worse is having to tell the client their check was returned.
Needless to say, had we used Wave Bank Payments, this could have been prevented.
Because Wave Bank Payments take 4-7 to reach your bank, transfers may not be the best payment solution if you’re in a hurry. If you have a client located on the other side of the country, waiting a few extra days to receive funds (versus waiting for a check to arrive in the mail), via Wave is probably not a big deal.
A possible negative, especially with new customers is the trust factor. A new client may be hesitant to transfer funds to your account until a level of trust has been established.
Wave claims to have 2 million users, but that does not mean your client is familiar with Wave. Asking a new client to transfer funds via a service they are not familiar with could be a roadblock.
The Wave Backstory
Wave of Toronto, Canada started as free online accounting software offered to small businesses. Founded in 2009 as Wave Accounting, Wave branched into financial services and began offering credit card processing in 2012.
Because of it’s roots in the accounting world, the suite of accounting software offered free by Wave is very robust. It’s not clunky software thrown together to as an add-on to its credit card processing and bank transfers services.
It’s quite the opposite. The fintech capabilities compliment the suite of accounting software.
Unlimited Invoicing, Accounting and Expense Tracking
The invoicing software offered by Wave is really good. You can create your own customized invoice and build an address book of clients you regularly bill via online invoicing.
Some of the other useful invoicing features include:
- Recurring billing
- Automatic payment reminders
- Payment information automatically syncs with the accounting software
- Save credit card information for future payments
- iOS and Android apps
- Customer statements – summary of invoice and payment
- Ability to know if a customer viewed your invoice
- Automated emails when payment is received
- Send invoices uses Wave, Gmail or Outlook
- Duplicate invoices
- Track overdue invoices
Because Wave integrates with your bank account, they offer near real-time expense tracking and account balances. When you login to your account, Wave displays the balance in your bank account and the date of the last sync.
If something does not look quite right, you can click update now to bring your bank account balance up to date.
If you do sign up, keep in mind Wave will have access to your entire bank account. If you feel odd about allowing a third party to pull data from your bank account, Wave may not be the right choice.
Wave fills a nice niche. It’s not the perfect scenario for every transaction, but it does offer an alternative to checks sent via US Mail or the typical $35 wire transfer charged by many US banks.
A potential downside for a company using Wave Bank Payments is the loss of buyer protection offered by a traditional credit card transaction. Once the transfer is completed, the funds are gone.
*Source: MarketWired — Survey Data Suggests the Death of Checks.