Merchant Services for Healthcare Providers

Merchant Services for Healthcare Providers

The medical industry has traditionally relied on paper billing for its services, and many providers report it can take a month or longer to be paid. The ability to accept credit cards is crucial in streamlining the process and has been shown to increase both office and patient satisfaction. 

Payment processing within the healthcare industry comes with a unique set of challenges and considerations. Privacy is a concern for any business, but medical providers also have a legal obligation to protect patient health information. For this reason, security is often a top concern for healthcare professionals that are hesitant to accept electronic payments. 

Why Healthcare Providers Need Merchant Services

The ability to accept debit and credit card payments is critical for most businesses, especially in the wake of COVID, when remote and online transactions became much more commonplace. But merchant services in healthcare is especially important for several reasons:

1. Medical Providers are Paid Differently

The healthcare industry processes payments much differently from, say, a retailer. While the service is generally provided in-person, the majority of payments for those services are done online, by mail, or over the phone. This is because insurance is billed first, and it can take some time for a claim to process. Once the claim is processed, any amount not covered is then billed to the patient.

2. Patients Are Paying Out of Pocket More Often

The average patient deductible has increased by more than 65 percent in the last ten years. This means that most patients will be paying more out of pocket before their insurance even begins to cover certain services. More payments is a good thing for a business, unless you are bogged down with paper statements and checks that need to be deposited. 

3. Merchant Services is Faster and More Convenient

As we discussed, it can take time for a medical claim to process through insurance. Weeks may have gone by already. Without the ability to accept a credit card, a patient or insurance company must then mail a paper check, which will take additional time. Then you must deposit the check which, depending on its size, can take several more business days to clear.

Offering patients a means to pay via credit or debit card is far more convenient than mailing in a check, and the payment will process instantly. Patients can also budget more effectively, since the payment will be withdrawn much more quickly from their account. 

4. Merchant Services is Secure

A good merchant services company with experience in the healthcare field will not only keep your patient’s financial data secure, it will also help you stay up to date with industry trends regarding cyberattacks and fraud. 

Many providers wonder if patient health information will be compromised in accepting electronic payments. While this is a valid concern, your merchant services provider will not require any details other than those related to the payment itself (name, address, card number, etc.). No information regarding the actual medical service or condition will be shared with the payment processor. 

Cost of Healthcare Merchant Services

Because healthcare is considered a high risk industry for merchant service providers, the fees associated with accepting these payments is often higher than with other businesses. However, this additional cost is typically mitigated by the fact that providers are paid on time and with greater efficiency. 

That being said, not all merchant services providers are created equal. There are instances when a payment processor may take advantage of the fact that doctors earn more on average and are too pressed for time to evaluate unnecessary fees.

If you are looking into accepting electronic payments as a healthcare provider, you will want to consult with an experienced merchant services broker. A broker works with many different merchant services providers; he or she will be able to find the best match for your business while negotiating fees and ensuring security compliance. 

At Summit Payments, we are well-versed in the medical industry and the nuances related to payment processing in this field. Contact our office to discuss the next steps for your medical office. 

Understanding Card Not Present Transactions

Understanding Card Not Present Transactions

What is a Card Not Present Transaction?

As the name suggests, a Card Not Present (CNP) transaction occurs any time a payment is processed without a physical credit card. Instead, the credit card information is entered by hand either by the consumer or the merchant. CNP transactions are most common for online orders or other remote transactions, such as via fax or phone. 

By contrast, Card Present (CP) transactions indicate a direct interaction with a customer and credit card. CP processing involves actually swiping or dipping the credit card in a reader at the point of sale. 

What Are Some Examples of CNP Transactions?

CNP transactions are not new, but they gained significant traction in the wake of COVID-19. The ability to accept payments remotely became essential for businesses to stay open during lockdown, and consumers have since developed a general preference for shopping online. 

These days, nearly every kind of business accepts remote credit card payments. But some of the more common forms of CNP transactions involve:

  • E-commerce, which includes all online purchases of goods and services
  • Auto-payments or recurrent online transactions, such as subscriptions
  • Take out and delivery food services (this includes phone orders as well as mobile apps)

Fees and CNP Transactions

Just as you are charged certain fees for physical CP transactions, you are also responsible for fees each time you complete a CNP exchange. One of these is known as the interchange fee. This is the percentage a card-issuing bank charges a merchant each time the card is swiped or entered remotely. 

Interchange fees cover handling costs and mitigate risks associated with approving payments, such as fraud or chargebacks. Credit card fraud accounts for tens of billions of dollars in losses annually, and the majority of these losses are shouldered by the issuers

Without the need for a physical card and other validating factors, such as a PIN, signature, or ID card, CNP transactions are associated with a much higher risk of fraud. Because of the increased risk in approving these kinds of payments, the interchange fees for CNP transactions are usually higher than when the card is present.

Tips for Lowering CNP Fees

The interchange fees assessed for your CNP transactions will vary, but there are certain steps you can take to help reduce overall costs:

  1. Use a merchant services company that includes built-in fraud tools, such as zip code and IP address verification.
  2. Require full customer addresses for remote transactions.
  3. Fill in as many fields as possible.
  4. Keep all information organized and protected.

Get Help Processing Credit Card Payments

If you are interested in accepting credit card payments, both in person and remotely, a merchant services broker is a great place to start. Summit Payments matches businesses with the perfect merchant services provider while continually looking for ways to reduce fees and increase security. Contact our office today to see how we can help.