5 Common Myths About Online Payment Options and How to Choose the Best Option for Your Center

When it comes to collecting tuition payments, it can be one of the most daunting and dreaded parts of running a center. It can take so much time out of your schedule to collect, process, deposit, and track down the families who pay late or have checks bounce, etc. Hours and hours are taken out of your week where you could be spending those hours in classrooms, mentoring teachers, catching up on paperwork, and more. 

A recent survey was done with over 500 parents in the US and Canada, and it is shocking how many parents are still paying in-person rather than using an online payment option.  Using online payment options can seem intimidating to a center director or owner, and it may seem like an expensive option, but after reading the research and after reading this, you’ll want to switch! 

Since millennials make up the primary demographic of today’s childcare parents, it is important to know that 85% of the parents surveyed pay at least some bills online, and 60% pay at least half of their bills online. It seems like common sense then to cater to millennial parents by offering automated online billing, but this survey also showed that only 39% of centers offer payments online. 

Let’s take a look at some myths when it comes to online payments, and let’s squash them here and now. 

Myth #1- “It is too expensive to switch to an online payment option. They will just rip me off.”

Does it cost money to have a software that helps collect and process tuition? Of course, it does. But guess what? In the long run, it will save you money!  If you were to calculate the amount of time it takes for you as director to create invoices, send reminders, collect tuition, track it, process it, deposit it, and create receipts, not to mention deal with those who are late and add on fees, (yikes, I need a nap!)  how many hours do you suppose that would take? Trust me- it would take WAY more than what it takes to set up an online option and press the button. It probably takes over 30 hours or more to do what was just described. With tuition software, it would take about 1 hour once it is all set up. Think about the number of things you can be doing as a director with that extra time, not to mention the money you would save! Another benefit to using the payment option in terms of cost is that doing so automatically and online would allow for receiving payments to be quicker than if it were cash or check, where things would need to be processed and deposited.

How do you make up for the fees that it costs to process tuition using an online option? Build it into your tuition fees! Next time you do a tuition increase, that would be a great time to implement this program. Charge families extra to use a credit card since that is what tends to cost the most. 

Myth #2- “It is not safe and secure, and parents won’t trust it.”

This is something we hear all the time. But guess what? Literally, everyone is buying things online. When choosing the right software for your program, just be sure to use a reputable one that explains how it is safe and secure. As a daycare provider, I’ve been using the same payment software for over 10 years and have never had a problem with safety or security. There are great programs out there, so just find the one that works for you. Parents, especially millennial parents, buy the majority of their products online, so they will not even think twice about paying tuition this way. Parents want convenience, and this is a great way to have that. All reputable companies that sell this type of software also have a stamp of approval for having safety and security.

Myth #3  “Parents would rather have the flexibility to choose how and when to pay.”

Since most parents are paying online and would prefer to not have to think about it, this myth is easily busted. The Parent Satisfaction Report revealed that most millennials have never written a check before, yet so many providers still accept checks or cash only. As providers, we need to make sure we are accommodating our customers and implementing changes when it is helpful. Giving parents too many choices for payment will add confusion and make it difficult to track. When you find the payment software that works best for you, consider making it a requirement for families so that it is set up for an automatic transaction.  This eliminates late payments and the need to track people down. This is how my center has done it for 10 years, and I have never had a parent complaint. At the tour, I always explain how payments work. Sometimes they request to pay twice per month rather than monthly, but other than that, there are no extra requests or complaints.  It is the “norm,” and frankly, it’s expected. If I were a prospective parent on a tour, and I found out that a daycare only accepted cash or check in the year 2021/2022, I would assume that this center does not have it together. I would assume that they are behind the times and lack in other areas as well. 75% of parents that were surveyed said they wished their daycare provider would make payment easier. The report also states, “A troublesome payment process is a regular annoyance that will build up over time and result in less happy customers.”  

Myth #4 ”It is way too difficult to figure out how to use an online payment software”

Any new software will require some training and learning. But most of these companies provide trainers who will remotely train you on how to set it all up. There are training videos, manuals, etc., but the best part is having troubleshooting help and training whenever needed. Having a few of your administration staff get trained on the software is key. Plan to have this take place as a professional development day and learn how it all works. As long as you are willing to learn, this will not be a difficult process. When choosing the right company to go with, ask each one to show how easy it is to use and implement.

Another great option to make this easier for you to adapt to is to see if the chilcare app that you currently use offers the billing and payment option.  Since you are already familiar with that app, why not explore what else is offered?

Myth #5 “Parents prefer to pay in person so they feel like it’s a more personable experience.”

Nope. Not true. Parents DO prefer to have a personal experience and interact with their child’s teacher and director, but this does not have to occur with payment. Parents are happy to set up an automated and recurring payment rather than write a check or bring in cash or even bring in their credit card each month. There are plenty of other ways to make parents feel like they are getting a personable experience like having coffee in the morning and greeting each family, having teachers greet each child and family at drop off and pick up, etc. Payment does not ever need to be an excuse for personable experience. The HiMama report clearly states that “the gap between how centers collect payment vs. what parents prefer is clear. Only 11% of our respondents pay online with a credit card, despite this being one of the most familiar and preferred payment options for Millennials.”

Are you convinced yet that automated online payment options is the way to go? If you are not already using a software for this, please look into it. Parents want convenience and do not want to spend time getting cash out of the bank or remembering their checkbooks. They prefer quick, easy, and safe options that are professional. Having this option shows that you care about their time and want to be organized. It is a win/win for both parents and providers, so what are you waiting for?

Want even more insights into what matters most to parents? See what our survey of 500 parents found in our Childcare Parent Satisfaction Report!

Missy Knechel

Missy is a professor in the early childhood department at Eastern University and director of Victory Early Learning Academy, a childcare center that she started ten years ago. Prior to that, she taught Kindergarten and second grade for a total of 10 years. She has been married to her best friend, Jason, for 15 years, and together they have four beautiful children ages 5, 7, 9 and 11 in the suburbs of Philadelphia, PA. In her spare time, Missy loves to bake, read historical fiction, sing karaoke and travel to Central America on short term missions.

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