Do you know what Steph Curry and Cristiano Ronaldo have in common? Besides being world-class athletes, both have used cryotherapy for years. They say it’s key to a fast recovery. The cryotherapy craze has now gone mainstream. Everyday folks are now entering the -200 degree chamber. According to market research, cryotherapy and cryosurgery market will grow by 6.9% per year through 2023, giving the industry a total revenue of $2.65 billion. If you offer cryotherapy at your physical therapy clinic or health and wellness center, you’ve made the right choice. You can benefit from the boom. More importantly, you can help people. As an article in Healthline notes, benefits of whole-body cryotherapy abound include the potential to speed up the healing process and reduce migraine symptoms, chronic pain, and arthritic pain. It may even help prevent dementia and treat dermatitis, low-risk tumors, hemorrhoids, and other conditions. In addition to helping your clients, you must take care of your physical therapy business. That means ensuring you don’t unnecessarily lose revenue. You may have noticed you pay around 3% in credit card processing fees, but perhaps you shrugged it off as not a big deal. Don’t do that! Because that 3% could decrease your profit margins by double digits. Yes, you read that right.So, what can you do? Here’s what you should know about credit card processing and how your cryotherapy business can eliminate those fees.
Protect Your Investment in Cryotherapy
Opening a cryotherapy center isn’t cheap, considering the cost of a cryotherapy chamber. Cryo Centers of America, an industry leader, estimates it costs between $150,000 and $200,000 to open a cryotherapy center. If you offer cryotherapy as an additional service at a medical spa, you have other costs too. You also have ongoing expenses, such as insurance, staff, equipment maintenance, and supplies. Simply put, you don’t need to spend thousands of dollars each year in credit card processing fees.But chances are you probably do. That’s why you need the cheapest credit card processing possible. It will make your business more profitable and sustainable.
How Much Are Credit Card Processing Fees for Your Cryotherapy Center
First, consider the average fees of each payment network:
As you can see, you probably pay around 3% on each transaction. But it could be more.
A survey of cryotherapy centers would probably reveal more complex fee structures. It’s not as simple as a flat fee per transaction.
Some merchant service providers have multi-tiered plans, monthly subscription fees, and different rates for different types of payment. And don’t forget about hardware and software costs. For instance, if you use Shopify as your merchant service provider (MSP), below is what you pay in credit card processing fees. See how fees differ for online and offline payments, and how monthly rates vary by tier.
Basic (left) costs $29/month
Standard (middle) costs $79/month
Advanced (right) costs $299/month
If you want to find the cheapest credit card processing possible, you must analyze everything in the MSP’s pricing plans. While companies like Shopify offer transparency, not all MSPs do.
What Your Cryotherapy Center Must Know About Credit Card Processing Fees
Now that you understand the importance of getting the cheapest credit card processing, learn what to look out for when researching MSPs. First, check the total fee. This is the sum of the following:
Interchange fee: charged by the card-issuing bank
Assessment fee: charged by the card-issuing brand
Processor markup: charged by your MSP
Note: The processor markup may be charged in a variety of ways. It could be a markup on each transaction fee or a monthly or annual subscription fee. Your cryotherapy center can potentially negotiate 5-10% off this amount. Your MSP may charge early termination fees or account closure fees. Also, check for chargeback fees, which occur when a customer disputes a charge, and voided transaction fees.Second, understand MSP pricing models. You have two options
Pass-through pricing: Avoid complex fee structures by paying a fixed interchange fee. Based on the card brand and your payment processor, you’ll also pay a variable fee and markup.
Tiered pricing: Also called bundle pricing, you pay fees according to your category. Many MSPs simply charge the highest fee possible in your category.
If you want the cheapest credit card processing for your cryotherapy center, opt for pass-through pricing. It offers transparency and affordability that you don’t always get with tiered pricing.
How Much Can Your Cryotherapy Center Save on Credit Card Processing Fees
To show you how much your cryotherapy business can save with the cheapest credit card processing, let’s do an exercise. Imagine the following scenario:
You charge $60 on average for cryotherapy (data from Groupon)
Nearly half of your customers pay with a credit card.
60% of your revenue comes from credit card transactions, as consumers are more likely to use a credit card for higher value transactions (according to Federal Reserve data). For instance, you may offer discounts for purchasing 5 cryotherapy sessions at once, and for that transaction a client is more likely to pay with a credit card.
That leaves 60% of your cryotherapy revenue subject to credit card processing fees. How much money could you waste on fees then? A lot. Consider this:
You pay an average credit card processing fee of 3.1%.
You treat 20,000 cryotherapy patients per year. At $60 per session, that means you bring in $1,200,000 in cryotherapy revenue.
You have a net margin of 8%. That means you make $96,000 per year from cryotherapy treatment at your clinic.
60% ($720,000 of your revenue) comes from credit card transactions.
You pay a fee of 3.1% on $720,000. That means you pay $22,320 in credit card processing fees. Wow!
What if you could eliminate paying those credit card processing fees? Your cryotherapy profits would increase from $96,000 to $118,320. That’s a salary increase of 23.3%!Need any more motivation to look for the cheapest credit card processing? Because with more revenue from cryotherapy back into your pocket, you could expand the business, save more for retirement, spend more on entertainment, buy a bigger house, and more!
Enter the Cash Discount Program: Your Path to the Cheapest Credit Card Processing
You should look for the best payment processors. You don’t want to spend too much on fees. But did you know you can do even more? There’s another way to reduce how much your cryotherapy center pays in processing fees? It’s called a cash discount program. This system gives discounts to clients for paying in cash. They can still pay with a credit card, but you’ll offset the processing fees via a markup. This way, you take home 100% of your cryotherapy revenue. The Dodd-Frank Wall Street Reform and Consumer Protection Act makes cash discount program completely legal. Even better, it’s not just you saving money. Your cryotherapy patients save by paying with cash. In short, a cash discount program gives you free credit card processing. Like to learn more?At NadaPayments, we can help your cryotherapy clinic implement a cash discount program. Contact us at +1 (929) 293-1800 or click the link below.