Practice Management Moment: Not All Merchant Processors Are Created Equal

The vast majority of all revenue flowing through any practice that is coming outside of insurance is coming from credit cards. Merchant processors are an essential part of your team and it is important you understand the multiple areas in which they can impact your business.

1. Rates & Fees
Merchant accounts generally have a per transaction cost as well as a percentage of all revenue collected. This is based on interchange, and they are going to charge a rate above interchange. However, with the changing landscape in online and digital transactions, long-held merchant accounts are often more expensive than some of the newer systems and options available. Taking a few minutes of your time to research per transaction costs as well as your rate and any hidden fees could be worth thousands of dollars to you personally.

2. Accessibility
Each merchant account has different guidelines on how and when you get to access your own money after a transaction. Some have mandatory hold periods, while others will clear transactions in near real time. Having accessibilty to your own revenue is important and worth your time to know how your current account works.

3. Reserves
Each merchant services company has different actions with regards to how they will handle your personal funds. Many require a certain percentage of your funds sit in reserve for 90–180 days. This can be very disruptive to your cashflow and is not mandatory for all merchant accounts. It never hurts to compare other services to ensure you have your best possible financial situation in place for your practice.

4. History & Relationship
Merchants are watching for your history of purchases and transactions. Amounts, quantities, chargebacks, cancellations, refunds, all of it. The longer the relationship with the merchant, the more stable your merchant account becomes. This is the value of selecting a good partner and building a solid relationship.

5. Technology
Each merchant has different techological capacity. Some key things to look for are do they have access to apple pay, captive, text, email, online pay, direct integration to web pay, point of sale technology, etc.

As part of managing your business, it can be a good practice to evaluate this important partner on at least an annual basis.