A debtor is insisting on paying an invoice using a credit card

A debtor is insisting on paying an invoice...

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Hello,

I have a debtor who owes me £1200, and he accepts that it is due. However, he says the invoice must be paid by credit card. We didn't discuss method of payment before I did the work because I just assumed it would be BACS.

Common sense says a debtor can't determine a different method to payment than what is 'normal', but what is my specific legal basis - is there a case law I can push back with? (I can't find one on google)

I don't have a standard credit card terminal. I do run an ecomerce site which has credit card processing integrated into it, but to set it up for this one payment would be about 5 hours work and it would settle in USD so I'd have to pay credit card processing fee and the currency conversion commission back to GBP.

Ideally I'd like to push back with a legal basis and then take them to small claims court (as it's only £70 it would cost less than the workaround in the paragraph above), and I would get the experience of suing a company. (I guess I might even get the £70 awarded as costs as well)

Given the debtor is a large company of good reputation, what do you think I should do?

Thanks,

S

Replies (18)

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By Cardigan
28th Mar 2014 23:19

Paypal

Could you set up a Paypal account to accept the payment? This is what I do. The charges are 3.4% plus 20p per transaction. It would be cheaper than the small claims court and a lot less hassle (not to mention the loss of reputation.)

Cardi

 

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By johngroganjga
29th Mar 2014 06:36

I am no lawyer but ...
I don't think that as a matter of law a customer can refuse to pay unless by credit card. I would have had many free meals in restaurants over the years if that was the law.

So you are entitled to say that you are unable to take payment by credit card and he must find another way to discharge his obligation to you - if necessary by taking cash advances off said credit card.

But if you wanted to accommodate him by setting up a Paypal account that may be the best practical solution.

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By Marion Hayes
29th Mar 2014 08:34

No right to insist

Unless you offered the facility in the first place.

I would write back and say that there was no offer of such a facility but, in the light of his ongoing custom you would be prepared (if you are of course) to create a paypal facility to enable him to pay. Any such payment is subject to an administration charge of 5%. I assume you can set the facility up to add 5% on automatically?

Failure to pay within 14 days will result in immediate court action.

Or you can just go to small claims online service and pursue him straight away

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By tom123
29th Mar 2014 08:58

Find a way to take the money now

You should really find a way to take the money now, or there might not be any in the future. He is paying by credit card possibly because he has no money in the bank.

I have just signed up with worldpayzinc, which charges 2.75% and with no monthly fee or terminal.

Bird in the hand and all that,

 

 

Thanks (1)
Replying to mkowl:
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By andy.partridge
29th Mar 2014 10:22

This looks good

tom123 wrote:

You should really find a way to take the money now, or there might not be any in the future. He is paying by credit card possibly because he has no money in the bank.

I have just signed up with worldpayzinc, which charges 2.75% and with no monthly fee or terminal.

Bird in the hand and all that,

 

 


Don't you have to pay £60 for a keypad?
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Replying to MartinLevin:
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By tom123
30th Mar 2014 19:48

No keypad needed

andy.partridge wrote:

tom123 wrote:

You should really find a way to take the money now, or there might not be any in the future. He is paying by credit card possibly because he has no money in the bank.

I have just signed up with worldpayzinc, which charges 2.75% and with no monthly fee or terminal.

Bird in the hand and all that,

 

 


Don't you have to pay £60 for a keypad?

Andy, no keypad is needed if you are taking 'cardholder not present' transactions, ie over the phone.

We have taken two payments so far - simple online tool,

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By zebaa
29th Mar 2014 09:13

Agree with tom123 & others

I agree with tom123 & he is likely to be in some sort of money trouble. Get paid quickly or it may be not at all. Avoid court. Really, really, avoid court. Down that road delay & uncertainty lay.

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RLI
By lionofludesch
29th Mar 2014 11:08

Legal Tender

There's always good old legal tender !!

Though less than convenient in Scotland or Northern Ireland, where banknotes aren't legal tender.

No - he can't insist on paying by credit card.  But if you decide to accet some form of credit card payment, you can add a charge to cover your extra costs.   Making that charge excessive might make him think twice.

Once you've been paid, think about dumping him.  He's trouble and it sounds like he's short of cash.

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By kiwilondon99
29th Mar 2014 14:12

beware the chargeback

 

you can see this happening - once the debtor has paid.. he' ll claim  [whatever excuse ! ] and you will be chargedback + be all out of funds again

anything to not pay..

is he that type of client 

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By stubarny
29th Mar 2014 15:01

Thanks everyone,

 

I'm a bit confused why they're insisting on credit card. It's a £30 million turnover company that's been around for 30 years, they've just been bought out be a massive parent company, and have the best reputation in their industry. I did wonder if they were trying to pay it quietly under miscellaneous expenses without management finding out, but they placed the order using a purchase order which is quoted on the invoice so that can't be the case. And I would have though that paying by credit card is more awkward for them then just putting the invoice on the next BACS payment run. It just doesn't make much sense.

 

Thanks for the above advice - I'll suggest to the client payment by paypal with a 5% addition and see how they respond.

 

Thanks,

 

S

Thanks (1)
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By marks
29th Mar 2014 22:35

Izettle
Try this

Costs about £50

Is a chip and pin machine that connects to your mobile or computer

No monthly charge and maximum 2.75% transaction fee which drops the more you put on the card

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By Cloudcounter
30th Mar 2014 10:55

Go Cardless

Ignoring the fact that the debtor has no right to insist on paying by card, you could look at Go Cardless.  Quick sign up, no machines and commission of 1% capped at a maximum of £2

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By mark_doherty
02nd Apr 2014 12:34

he just wants to delay
The contract is not clear.
You both have to be reasonable.
Offer sharing extra Cc costs.
Offer legal tender
Go to court, where
He will have to pay what he agrees into court, and the court has to accept legal tender and I doubt if they would accept cc.
The judge will take a dim view of the fact that the court has to accept legal tender and none was offered. You get costs. Just my 2penth worth. I have No law experience!
But my guess is he is waiting for a end of period.

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By Democratus
02nd Apr 2014 12:42

Tell him to get the cash on the card...

and give it to you -this is ridiculous

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By Caber Feidh
02nd Apr 2014 21:06

The client is obliged to pay in legal tender (cash)

Stubarny's client needs to discharge a debt that has already been incurred. Unless stubarny's contract with his client allowed for some alternative methods of payment then the client is obliged to discharge that debt in legal tender.

In England and Wales the £5, £10, £20 and £50 notes are legal tender for payment of any amount. However, as lionofludesch has already said, banknotes (including Scottish ones) are not legal tender in Scotland or Northern Ireland. The £1, £2, £5 and £20 coins are legal tender for any amount throughout the UK.

Caveat: I am not a lawyer.

Query: Why has this 28 March query only been emailed to me today (2 April)?

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Replying to Phoenix_Tiger:
RLI
By lionofludesch
11th Apr 2014 13:59

To be clear .....

Caber Feidh wrote:

In England and Wales the £5, £10, £20 and £50 notes are legal tender for payment of any amount. However, as lionofludesch has already said, banknotes (including Scottish ones) are not legal tender in Scotland or Northern Ireland.

Nor Northern Irish notes - just to be clear.

Shinty man, Caber Feidh ?

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By pauljohnston
11th Apr 2014 13:32

This maybe what is forced opon him

Some years back on of my clients did work for a large company.  In order tro reduce costs this company would only pay by creedit card.  My client told them that this was ok but that he would have to charge a handling fee.

THe bill plus the handling fee was paid without question.

 

YOu dont say how much the bill is for but tell them to accept credit card there is a 5% charge.  If this is ok set up paypal or other account eq intuitpay http://www.intuit.co.uk/accept-card-payments/intuit-pay-new.jsp

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By mrme89
11th Apr 2014 15:01

I know of a roofer that did a large job for a multinational company.

 

They insisted on paying cash - when he collected the 'cash' he was paid out in £1 coins.

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