Tech Tuesday: Credit Card Processing & Surcharges


In the past 5-7 years the range of payment options for counselors has had a significant expansion. This is primarily linked to the smartphone and the capabilities it possesses in business functions. If you’re not accepting credit card payments, you might be missing out on potential clients. But, what to do about the fee the bank or credit card processor charges you, the counselor, for the charge?

There are lots of companies you can employ for credit card processing, but I suggesting using Square. I began using Square early on in my practice because I knew that having a limit on how my clients could pay would limit clients from booking appointments with me. Square is a credit card processor that plugs into your smartphone headphone jack. They charge a flat 2.75% fee for every transaction, and deposit the funds into your account at the end of every business day. It’s a fantastic company that has spawned dozens of other competitors.

Every credit card processor will levy a fee for the credit card charge. Sometimes is a “swipe + percentage,” other times, like Square, it’s just a percentage. Some counselors charge the fee (I’ve seen both the “flat rate of $5”, or “x percent” of charge) to their clients for paying with a credit card.

For about a year, I followed this practice. It was costing me a couple hundred dollars a month in credit card fees. My perspective changed on this when I went to see a healthcare professional that charged me this fee. It’s not that I was offended, I understood the reasoning, but it felt cheap to me. It just seemed like bad business. I immediately changed my practice to reflect this, and suggest you do too. In some cases, this practice is illegal (see linked article at bottom of this post).

It’s easy to get caught up in the technology and functions that it can add to our business, all the while forgetting to identify if the practice is good for business or not. In this case, I think offering credit card payments is a plus but charging a fee is a negative. If you want to recoup what you pay to the bank/processor, build the surcharge into your hourly rate and then offer a discount if a client pays with cash or check.

Caleb’s Perspective on Surcharges:

Samuel shared some compelling reasons why he builds the credit card processing charge into his session fee. My wife would agree with him that this is the better way to go and that the processing charge that I pass on to my clients can feel cheap. I get this perspective, and I don’t like to be cheap. I don’t want my clients to feel that they are getting a subpar experience because they have to pay the charge.

The reason I charge a processing fee is because of insurance. If a client uses their insurance, then the contracted rate applies. This means that I can only charge the rate that I have previously agreed upon with the insurance. Usually, the client has a copay and this is where they want to use their debit or credit card. By my agreement with the insurance company, I can’t change their copay fee. It is set. I can’t build in any cushion to take the brunt of the processing and surcharge fees unless I charge an extra fee.

So, this is why I charge a credit card fee. It does not usually cover my cost, but does help me mitigate some of my loss. Most of my clients do not complain about the fee and those that do make sure to pay me with cash or a check.

For more reading about the legality of a surcharge, check out this article:

image courtesy of Sean MacEntee via Flickr

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