By Jennifer Nieto, President; Best Card

Have you noticed the cost to process your patients’ credit cards is increasing faster than your card sales? If so, you’re not alone.

What’s behind the increase in costs? 2019 saw a flurry of mega-mergers in the credit card processing industry. As large companies took on the costs of absorbing other large companies, individual merchants were often the ones paying the bill in higher rates and fees.

For the first time ever, in 2019, the average dental office was paying more than 3% in fees to run its credit card sales. (TDA Perks Program partner Best Card’s national average effective rate is 2.18%.) To determine the rate you’re paying, using a recent statement, divide the fees charged by dollars processed. That’s your effective rate.

Know a great deal now may not be one later.

Many dental offices are great at asking questions and negotiating fees when signing on with a processing company. But often they don’t continue to keep an eye on the fees; and a great deal when they signed up may be far from great a year later.

What many don’t realize is that any credit card processor can increase costs above what’s on signed contracts at any time, as long it includes a notice in the fine print of its monthly statements. Many companies introduce increases 3-4 times each year, and often charge high termination fees, making it prohibitive to leave them prior to contract end date.

Increased costs can come from straightforward rate increases or through new “junk fees” and/or surcharging on top of legitimate fees, which are usually pass-through costs. Because credit card processing is very detailed, it can be difficult to tell where extra costs are being incurred. However, the end result will be clear on the monthly bill.

Be aware of expensive options and alternatives.

Credit card processing solutions integrated into dental software, as well as those from big bank providers, tend to be some of the most expensive options dental offices are paying for, Best Card cost analyses show. (TDA Perks partner Best Card offers an option to auto post payments to patient dental charts for $30 per month.)

Know that the largest factor in what your credit card processing fees are—assuming your processor charges you reasonably—should be the type of card your customer is paying with. Keep in mind the following.

  • A corporate rewards card with substantial perks for the cardholder. These kinds of cards are much more costly than debit cards from big banks, which are the cheapest to process (no PIN required).
  • Insurance payments made via virtual cards sent to your office to key in. These are likely to be among the most expensive card types, increasing the average costs of card processing. This can be difficult to absorb, especially if you already have tight margins on reimbursement rates from insurance companies.
    Insurance companies should allow you to refuse credit card reimbursements and request a paper check or Electronic Funds Transfers (EFTs) that directly deposit payments to your bank account at a substantially lower cost than the 2.5-3% rate charged by most virtual cards. If you have questions regarding this, you can call the ADA Council on Dental Benefits at 800-621-8099.1

About Surcharging the Patient

Some credit card processors are aggressive in marketing surcharge or “cash discount” solutions that surcharge credit-card transactions so customers pay the card-processing bill.

Many practices find this is not a good solution for a variety of reasons.

  • Huge increase in overall cost. Most processors offering these services charge a 4% surcharge to patients. That’s a big increase in total cost compared to most credit card processors and it all goes to padding the credit card processor’s profit margin. If you increased your own costs by 4%, you would benefit from the increase instead of the credit card processor, and fewer patients would probably notice the increase.
  • You’ll end up paying an even larger percentage on those payments out of pocket. Insurance payments that are issued via virtual card have a finite balance.
  • Patients hate it. Recent surveys showed people who were surcharged for credit card transactions had a very negative feeling towards the experience, and indicated it made them less likely to return to the business that surcharged them. Dental offices thrive on high patient retention, so it may cost more in missed revenue than you’d save on fees.
  • Texas law prohibits surcharging on transactions, and card brand regulations have very specific requirements that surcharge programs must comply with.2
Best Card offers exclusive credit card processing rates for TDA members, have excellent customer service, and are committed to keeping costs low for dental offices. The average dental office saves 3,256 (24%) annually on the rates Best Card guarantees to TDA members.
Learn more about Best Card.


1https://success.ada.org/en/dental-benefits/dental-benefits-qanda?utm_source=adaorg&utm_medium=VanityURL
2https://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx