When we launched our new Protected Payments service, powered by Shieldpay, we wanted to make it easy for homeowners and tradespeople to understand the benefits of using the service to pay for work, and why we think it’s such an important move for home improvements.
We know that sometimes there are questions that an FAQ can’t answer. So, we gathered some examples that have come in over email and our Facebook page, called up Tommy Walsh (builder and former Ground Force presenter no less), and got him to put them to our CEO, Celia Francis and Tom Clementson from Shieldpay. All on one very rainy day in October.
What did we cover?
The topics discussed covered everything from how much longer you’ll have to wait for payment if you’re normally paid cash in hand (if anything) and what would happen if you needed to pay upfront for materials, through to how Protected Payments can help a homeowner avoid being in a situation where they feel they were overcharged and unhappy with the quality of the work.
Here’s what they had to say. Watch the video above or scroll down for the main questions and answers.
How does Protected Payments work?
Celia: The homeowner’s money gets uploaded into a secure Shieldpay vault and then at the end of a job the money’s released to the tradesperson, once the homeowner is satisfied with the work.
Tom: Shieldpay are providing the payment services behind Protected Payments for Rated People. Using the service gives real peace of mind to the homeowner and it gives a certainty of cashflow to the tradesperson, as they know that when the job’s gone well, the money’s going to be with them instantly.
Can I be confident using this payment method, as it’s new for home improvements?
Tom: Yes, homeowners are delighted and tradespeople are getting an increase in trade by offering the service. We’re looking forward to seeing it grow and grow.
Is there a cost to sign up for Protected Payments?
Celia: It’s free for tradespeople, and for homeowners it’s 2% of the job cost.
What does the 2% cover?
Tom: First off, Shieldpay collect a bit of information about you before you sign up, whether you’re a tradesperson or a homeowner. We don’t perform any credit checks but we make sure that you are who you say you are and that you’re not on any naughty lists – so we check fraud and sanctions lists around the world. It’s quick, painless, not intrusive and it doesn’t leave a mark on your credit file. That signup process is free and done in real-time, so it’s really quick to open those accounts.
For that 2%, Shieldpay hold the money in a bankruptcy protected ringfenced account, so it’s not going anywhere until it’s either reversed or marked as finished when the job’s gone well. On top of that, if something goes wrong, we’ll handle any disputes, so that fee also covers the extra peace of mind to know we’ll mediate between the homeowner and the tradesperson if anything does go wrong.
I’m often paid cash in hand at the end of a job. How much longer will I be waiting after a job is complete to get paid?
Tom: When the job’s done and both you and the homeowner are happy, that money can be with you instantly and Shieldpay can pay that out to your bank account or payment card within 15 minutes.
The total cost of some work I had done was more expensive than what it should have been, and I wasn’t happy with the quality of it. How could Protected Payments benefit me if I was in a similar situation again?
Tom: In general, it’ll help to set expectations first of all, including detailing the job that you’re going to have done so that the homeowner and tradesperson are on the same page. But, if something does go wrong, Shieldpay very quickly jump in to mediate and try and get you to come to an agreement. We can do a partial refund, a full refund or move the money along if the job gets corrected.
If there’s a more serious problem, then we’ll step in and look at the evidence, thanks to the licences granted to us by the Financial Conduct Authority (FCA). It’ll go through a quick process and we’ll come to a ruling based on the evidence that we’ve collected.
What would happen if I needed to pay upfront for specific materials for a job?
Tommy: I’ve never asked anyone for money upfront. I believe that if you’re a good enough tradesperson and you’re confident in your work, then you can have a contract. I used to have a contract with my clients that I would get the first payment at such and such a date – staged payments if you like. As a tradesperson, you should be able to work for a week or two without demanding wages.
When it comes to money for materials, that’s easily resolved because if you’re a homeowner, you don’t have to give that to the tradesperson. Ask for a list and then order them yourself so they remain your property. Then if you don’t agree about the price of the work or there’s some other dispute, you’ve still got the materials and you’re not out of pocket, so they’re there for the new tradesperson that’ll be brought in to replace the other one.
Tom: Protected Payments is designed in such a way that you can put in staged payments. Create a list and agree that, then the money can be put in. When the materials have been picked up, that milestone can be released so we can help tradespeople with their cash flow while also protecting the homeowner. They don’t have to worry about losing that money.
How can Protected Payments prevent me from being out of pocket if a customer is taking a long time to pay after the job’s complete?
Celia: Protected Payments would show you that the money is already there to pay you as the vault will have been funded. Once the customer agrees that the work is complete as agreed, that money is released instantly so you don’t have to chase for that final payment.
Tom: If you were using Protected Payments, as soon as the job’s complete, your money would be sitting waiting for you.
For more information about Protected Payments, head here.
To view the results of our payments survey, visit this page.
Are you a homeowner wanting to find out more, or set up an account? Head here.
Are you a tradesperson wanting more information, or to set up an account? Head here.
For more questions and answers about Protected Payments, visit our FAQs.