6 Ways to Accept Debit and Credit Card Payments from Friends and Family

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6 Ways to Accept Debit and Credit Card Payments from Friends and Family

Damian Davila for LongLiveYourMoney.com

An estimated 40% of Americans carry less than $20 on them. Even worse, 9% of us don’t carry any bills or coins at all! As more and more people make payments using debit or credits cards, you may be finding yourself having a tough time collecting on money that you lend to friends and family. To give you a helping hand for the next time your buddy Joe or cousin Melissa tells you they have no cash on them, let’s review some ways that you can collect payment via credit or debit card and how much would those ways cost.

1. Paypal

With Paypal, you have two ways to collect payment from your cousin Melissa.

First, in the event that you and your cousin Melissa already have Paypal accounts, then you’re all set because you can receive a transfer directly to your account. If she funds the entire transaction with Paypal balance or bank account, then it costs her nothing to send you money. Just keep in mind that the processing time for eChecks is between three to six business days.

If your cousin Melissa funds with a debit or credit card, then she’ll pay a fee of 2.9% plus $0.30 and you pay nothing. For example, sending you $100 through Paypal with a credit card will cost your cousin Melissa $3.20. You pay nothing! Second, you can whip out your smartphone and use her debit or credit card. To do this you’ll need to order a free Paypal Credit Card Reader that you can hook up to the jack phone of eligible Apple and Android devices, then download the Paypal Here app for your Android or Apple device, and connect it to your existing or new Paypal account. Paypal charges you 2.7% per U.S. debit or credit card swipe and 3.5% + $0.15 for punching in a card number.

Make sure that you don’t lose that credit card reader, because only the first one is free. Any additional readers cost you $14.99 each.

Once you have received the funds, you’ll be able to transfer them to your bank account, spend them where Paypal is accepted, or use them right away with your Paypal Business Debit Mastercard.

2. Square

An alternative to Paypal Here is the Square app. This app allows you to accept Visa, MasterCard, Discover, and American Express debit and credit cards using your smartphone. The Square card reader is free to order and works with the Square Register for Android and Apple devices.

Square charges you a slightly higher fee than Paypal Here per swipe of U.S. cards, 2.75% ($2.75 for a $100 payment), but the same as Paypal Here for keyed-in cards, 3.5% + $0.15 ($3.65 for a $100 payment).

Regardless of the higher fee for swipes, one factor that gives Square an edge over Paypal Here is that you can still collect payment without an Internet connection. Just remember to reconnect your smartphone to the Web within 72 hours or your transaction will expire. This is a neat feature if you ran into your buddy Joe at places with spotty Internet coverage (underground bar) or no Internet connection at all (subway).

3. Venmo

With over $3.2 billion of payments processed for the first semester of 2016, it’s only a matter of time until you either send or receive a payment through the Venmo app, To exchange payments, both your cousin Melissa and you will need to download the Venmo app, which is only available only for Apple devices.

Here are two reasons that make Venmo a popular choice among Millennials. First, nobody pays any fees as long as the transaction is fully funded with monies from a bank account, Venmo account, debit card, or prepaid card. Only when your debtor uses a credit card, she will have to pay a 3% fee ($3 for a $100 payment) to Venmo. Second, moving money from Venmo to your bank account takes as little as one business day.

4. Snapcash

In partnership with Square, the popular social media service Snapchat allows you to send and receive payments using a debit card. This service is called Snapcash and has been around since November 2014.

You can sign up to Snapcash through the Snapchat settings or within a chat. Here is a step-by-step tutorial for both options. Need a reason to sign up? There are no fees to send or receive money through Snapcash but the funds must come and go to a debit card.

There’s an initial limit of $250 per week for sending money and of $1,000 per 30-day period for receiving money. However, you can increase those limits (up to $2,500 for sending money in most states) by providing your full name, date of birth, and social security number.

5. Facebook Messenger

Knowing that one of its strongest competitors was offering a way to send and receive money probably didn’t sit well with CEO Mark Zuckerberg. So, in March 2015, Facebook enabled users to exchange payments through Facebook Messenger.

You can send or receive money in Faceboook Messenger as long as you and your buddy Joe:

  • Live in the U.S.
  • Are at least 18 years old
  • Use a valid Visa or Mastercard debit card issued by a U.S. financial
  • Set your preferred currency to U.S. dollars
  • Aren't disabled from sending or receiving money on Facebook
  • Sending and receiving money on Facebook Messenger is free. While receiving funds on your account is instantaneous, your U.S. bank may take up to five business days to make it available to you. If the money doesn’t appear on your bank account after five business days, contact your financial institution.

    To protect your account and prevent any unintentional money transfers, you can choose enter a PIN before sending money in Facebook Messenger.

    6. Gmail

    No typo here. Yes, it’s true that you can send and receive money with Gmail. Still skeptical? On your desktop computer, compose a new email on Gmail and look for the $ icon at the bottom of the email (fifth place to the right from the blue “Send” button). This feature is only currently available to residents of the U.K. and U.S. Before you can send or receive money, you’ll need to set up a Google Wallet.

    Cousin Melissa or buddy Joe can send you money directly using their debit card, bank account, or Google Wallet Balance. As long as they’re using a desktop computer, they can send you money in Gmail. You can claim funds on both desktop and mobile devices.

    There are no fees to send or receive money using Google Wallet or Gmail. Once you receive funds, you can transfer from your Google Wallet balance to your linked bank account or debit card at no charge. Bank transfers are usually done within three business days and debit card transfers are completed within minutes but may take up to 24 hours at certain financial institutions.

    If you’re receiving money for the first time on Gmail, you can withdraw up to $1,000 directly to your bank account without verifying your identity. Now that’s an awesome email to receive!

    What are other ways to collect payment from your friends and family using a debit or credit card? Please share your tips by tweeting me at @DavilaDamian

    The information contained is intended to be for informational purposes only and should not be relied upon for investment, accounting, legal or tax advice.

    Damian Davila is a freelance writer living in sunny Honolulu, Hawaii. He writes about financial topics because he enjoys helping people save money.

    Born in Ecuador, Damian has traveled extensively and held positions in Mexico, Germany, Italy and the United States. He has a MBA from the University of Hawaii and a Masters in Educational Technology from a joint program between the Tecnologico de Monterrey and the University of British of Columbia.

    Find Damian online at Twitter, and LinkedIn.

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