Let’s start with the features that should be included in your package from your processor. Every business is different, but we’ve found that most dentists need the following features included in their dental credit card processing bundle.
- POS Terminal Configuration – You need POS terminals that can be configured to allow customers to setup profiles and schedule appointments. You also need to be able to store credit card information for easy processing.
- Virtual Terminals – If you allow customers to pay via online invoicing or over the phone, you’ll need virtual terminals in addition to the physical ones. These are terminals that allow merchants to swipe cards or manually key-in payment details from a browser. These are great if you’re taking payments over the phone.
- Email Invoices – Some processors allow email invoicing as an option. If this is interesting to you, be sure to explore that with your processor and learn how to set it up for efficiency.
- Stored Payments – Most dental offices have repeat customers, which makes it a smart move to store credit card information for easy payments. Doing so requires a system that is PCI-DSS compliant to protect the payment information. This function can be setup for customers to pay easily while in the clinic, or to be setup on recurring payments.
Dental Credit Card Processing Merchant Services
In addition to the features listed above, you also need to discuss HIPAA compliance and other important factors of the medical industry. Any merchant who performs medical services or collects medical information is required to follow HIPAA regulations. A failure to do so could result in some major fines and the loss of your business. Finding a credit card processor who can offer HIPAA compliance is critical for a dental office.
What is HIPAA?
HIPAA is the Health Insurance Portability and Accountability Act. It is a federal law that was enacted in 1996 to create national standards around the protection of sensitive health information. It is comprised of two basic rules: The HIPAA Privacy Rule and the HIPAA Security Rule.
HIPAA Privacy Rule
This is a set of standards that certain entities are required to follow regarding protected health information (PHI). The rule states that covered entities must follow the proper procedures to protect their patient’s PHI and not disclose any information to a third party without the consent of the patient. Entities in this category include healthcare providers, business associates for healthcare providers, health insurance providers, and more.
HIPAA Security Rule
The HIPAA Security Rule is a set of standards regarding the protection of electronic PHI. Any provider who collects PHI from their clients and stores it in electronic form is subject to additional security measures. These include taking the necessary precautions to protect against cybersecurity threats and other anticipated misuses of such information.
FSA, HSA, and Other Health Cards
Aside from HIPAA security and compliance, a dental office needs to consider other forms of payment outside the traditional credit cards that may be used. Many patients will have either a Health Savings Account or a Flexible Spending Account that is a part of their health insurance plan. These types of accounts come with debit cards that can be used for approved medical expenses, including dentistry.
In most cases, it’s a simple process for a merchant to be able to accept these types of cards. When your processor sets up your medical merchant account, you will be categorized with a list of merchant codes, or MCCs. These merchant category codes tell the POS terminal which types of payments are accepted for this business, and subsequently what types of fees to charge.
If your business is listed with the proper MCC code, you should be able to accept HAS and FSA cards with no issue. However, be aware that some of these types of cards have daily spending limits imposed by the patient’s bank. If this is the case, the card may be declined at your practice. Be sure to direct your patient to their administrator if this happens.
Dental Credit Card Processing Pricing
Last but not least, you’ll need to think about the pricing model you want to sign up for. Dentist credit card processing can be a really confusing thing if you’re not well-versed in the subject. There are generally three types of pricing models, each with its own pros and cons.
We find that for most merchants, the interchange plus model is the best pricing available. However, here’s the basic outline of each model so you can determine what’s going to work for your dental practice.
Interchange Plus Pricing
This is considered by many merchants to be the best pricing model available. The pricing is transparent and consistent, regardless of transaction volume or average ticket price. In this model, the processor passes the interchange fees and card association fees directly to the merchant, along with an agreed-upon markup fee to cover their costs. Each transaction will have the standard interchange fee that is charged by that specific card, along with the fee charged by your provider.
Interchange fees are the fees charged by each card network, which are non-negotiable. The card association fees are also non-negotiable. However, it is possible to negotiate the markup fee with your processor. The higher your sales and the more transactions you process per month, the better bargaining power you’ll have.
With tiered pricing, your credit card statement will be much easier to understand, but you’ll probably pay higher rates. This model takes all transactions and categorizes them into tiers, generally referred to as qualified, mid-qualified, and non-qualified. Each transaction in a given tier will be charged at the rate that has been assigned to that tier. As you can imagine, this makes the credit card statement less confusing and more streamlined.
The problem with this type of pricing is that the processor gets to choose which transactions fall into which categories. Every processor will categorize transactions differently, so comparing their services will also be complicated. If you choose to go in this direction, be sure to understand their tiers and how transactions are categorized.
Flat Fee Pricing
As the name suggests, this type of pricing offers one flat fee for every transaction of the same type. For example, the fee will be the same for every type of credit card, regardless of what the interchange fees are for each one. Since Visa, MasterCard, AMEX, and others all have different fees, this can make your statement super easy to read.
This is the simplest of all the pricing models but is also likely to charge you the most. With a flat fee per transaction, the processor is likely to err on the high side. That means they will charge a slightly higher fee on each transaction, just in case they fall into a category that has higher interchange or network fees. This is the processor’s way of protecting themselves from losing a profit on any given transaction.
Dental Credit Card Processing
Dental office credit card processing is very similar to other merchants in many ways. Choosing the right pricing model for your practice is really important. However, even more, important is making sure that your processor can offer HIPAA compliant hardware, software, and procedures to protect your patient’s PHI and your business’s reputation.