Medical Merchant Account

Medical Merchant Account Services for Healthcare Providers

The medical industry has grown by leaps and bounds in the last few decades. With advances in nearly all fields of medicine, the medical industry has continued to look towards digital solutions for many of their problems. Not only does science relies on technology, but many of the ways medical offices and healthcare provider accept payments has also become digital. The demand for medical merchant account solutions has risen dramatically in the last decade as technology has made it a more reliable and better payment option.

The costs for healthcare organizations are astounding when physicians reveal overhead is nearly 40% today.  As hospitals consolidate and patient databases grow, the need for healthcare providers to affordably manage their customers remains of utmost importance. Advances in technology have established online databases allowing healthcare providers to securely store customer information and share as needed. This shift towards a paperless society has also been seen in the way people make payments.

Healthcare Payment Processing Solutions

As insurance has become costly and complicated for the medical industry, physicians have preferred to accept payments.  During the same time, the use of credit cards and debit cards by consumers has continued to grow year over year. In response, the use by healthcare providers of payment processing through bank cards or echecks has also risen. Seeing medical offices with either a credit card machine or card swiper integrated into a payment gateway has become the norm.

The use of payment cards is one of the most convenient ways for customers to pay and merchants to manage funds. Payments sent through a payment gateway are easily stored for future reporting and accounting purposes.  This makes the financial management of credit and debit card transactions much easier than cash payments. Payment cards are not the only simplified payment method, echecks have also become more widely accepted.

With many of the changes to the banking industry in the early 2000s, the use of echecks has steadily taken off.  Merchants can easily accept a one-time payment or initiate a monthly billing profile for customers. Fees for echeck payments are generally much lower than that of credit or debit cards but have a slightly longer settlement period.

Depending on the needs of the medical office or healthcare provider, adding medical credit card processing or healthcare echeck processing services can be beneficial.

Medical Office Credit Card Processing Fees

There are a number of ways that merchant accounts can be priced. Depending on the payment processor and the fee structures used, the fees charged to merchants can vary dramatically.  This is one of the most confusing, and important, pieces of the processing contract for merchants to understand before agreeing.

Fees associated with a merchant account can be numerous and become very costly.  Including everything from the discount fee charged by Visa, MasterCard, Discover, and American Express to other account fees, the costs of a payment card fluctuate dramatically. Understanding the different fees can help healthcare physicians find the lowest cost medical merchant account solution.

The fees surround each transaction are some of the highest costs charged to an account on a monthly basis.  Fees are charged as either a discount fee, transaction fee or both. Some merchant accounts will not charge fees but for the vast majority of merchant processors, they will.

Transaction fees will normally only be assessed per occurrence, depending on the volume of transactions this can be costly or nothing of real concern. Discount fees, the ones that take a percentage of the sale, are widely viewed as the most expensive and troublesome cost to the merchant.

Discount fees can be charged to merchants through a number of ways.  The most commonly used fee structures today include Tiered Pricing, Interchange-Plus Pricing, Blended Pricing or Flat Fee pricing.

Tiered Pricing
One of the original and most popular pricing models used in the industry. Merchants were set up with a number of different tiers, known as qualified, mid-qualified and non-qualified. When a payment card was authorized, the payment processor prices the transaction according the lowest cost fee the card can be approved for. This has become a somewhat antiquated pricing structure due to its high costs, especially as debit cards continue expanding in usage.

Interchange-Plus Pricing
For most merchants, the interchange plus structure is the lowest cost way to accept payments. Pass through fees from the card association is charged to the merchant plus a small assessment charged by the merchant acquirer. While merchants might have difficulty in knowing the exact fees being charged by their customer's bank, they will know the fees of their payment processor. This simplified pricing structure allows for the lowest possible costs for every card to be realized by the merchant.

Blended Pricing
Offered by many of the eWallet and online payment processing services, blended pricing has become extremely favorable with startup merchants. Payment processors charge merchants a flat fee for every transaction, regardless if its a debit or credit card. With less fixed monthly fees every month, merchants will know the exact fees being charged on every transaction.

Flat Rate
This type of pricing structure allows merchants to pay a monthly membership fee to process their transactions. Payment processors offering this type of fee structure will assess a set fee per month based on the number or volume of transactions. Merchants opting for a flat fee merchant account will have peace of mind every month. Knowing exactly what their payment processor will assess them for fees can help merchants plan without any surprises.

Learning about the various types of pricing structures can help merchants find the best solution for their business. The Interchange Plus, Blending or Flat Rate could be beneficial to a business depending on their size and types of transactions. As for tiered pricing, we can unequivocally say that this is a much costlier solution for all types of businesses. Consulting a payment professional can help merchants determine what their options are and the best solution for the business' needs.

Start Your Healthcare Credit Card Processing

Physicians and Healthcare offices searching for more information about medical merchant account services are encouraged to contact our payment processing department. Whether prospective merchants need questions answered or a rate quote, our team of credit card processing professionals are happy to help.

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