Payment processing fees are a necessary evil for any business that accepts credit or debit cards. Most merchant processors charge a percentage rate based on the total dollar amount of the charge as well as a per-transaction fee. Some even charge an additional subscription fee for their service. High-volume practices are plagued by the per-transaction fees, and practices with high-dollar services, such as orthopedic surgeons, are overwhelmed by the percentages that claim bigger chunks of would-be revenue. Either way, providers are often hit by a mountain of unanticipated fees when they see a statement from their payment processor.
Another problem is that the total payment processor fees are made up of two kinds of charges, 1) the wholesale cost of transactions which makes up 75-80 percent of the total fees charged and is non-negotiable, and 2) the processor markup which makes up the other 15-20 percent and can be negotiated. Many times, when a payment processor is quoting what looks like extremely low processing rates, it is because they are only showing you the processor markup without the wholesale rate, for which you will, in fact, be charged when you receive your statement.
Another fun fact about payment processor fees (I know, right?) is many times you will pay one rate for card-present transactions, and a higher rate for card-not-present transactions. Only swiped or inserted cards are considered card-present transactions. If a patient physically hands you a card and you type in the card number, it is actually considered a card-not-present transaction and you will pay more due to the greater fraud risk. Experts suggest that if you will be accepting a large number of card-not-present transactions, you should choose a payment processor with better rates for these types of transactions.
The take-away here is that if the percentage rate from a payment processor looks too good to be true, it probably is. Do your homework and check out what you will really be charged.
Is your practice sick of payment processor sticker shock? Perhaps you are searching for a better, more price-transparent way to process everyday transactions? Well, you’re in luck. Health iPASS is proud to introduce HiPPAY, the payment processor with no setup costs, no subscription costs, and absolutely no hidden fees. HiPPAY offers a fixed rate of 2.3% and a low per-transaction fee. We hate to brag, but that’s kind of a big deal.
For more information about HiPPAY, email info@healthipass, or for current Health iPASS clients, contact your Client Success manager.