Chiropractors have to undergo rigorous training to enter their profession. As the Bureau of Labor Statistics notes, chiropractors must obtain a Doctor of Chiropractic (DC) degree, which takes four years to complete. They also require proper licensing and must pass the National Board of Chiropractic Examiners (NBCE) exam. Getting that education comes with a high cost, too. The average chiropractor goes into the field with more than $100,000 in debt, according to a survey of chiropractic students at Palmer College of Chiropractic. Expenses don’t stop there. As Tory Robson, DC and chiropractic consultant, states, chiropractor debt goes beyond student loans and includes practice loans (X-ray machines aren’t cheap). Debt can become the “unspoken killer” for chiropractors.With back-breakingly high loans and expenses, financial stress can easily impact chiropractors. The last thing a chiropractor should have to worry about is a dishonest merchant service provider (MSP). Unfortunately, MSPs often overcharge chiropractors for their chiropractor credit card processing fees. It doesn’t have to be this way. Here’s how chiropractors can lower those credit card processing fees and keep more money in their hands.
What’s a fair chiropractor credit card processing rate?
The average credit card processing rate ranges from 1.5-2.9%, if you’re accepting one of the four major cards—Visa, Discover, Mastercard, or American Express. If what you pay is on the higher end of this range, it’s probably not for a good reason. A survey of most chiropractic practice credit card processing fees would typically show that many chiropractors are on multi-tiered plans. These plans come loaded with hidden fees and complex surcharges and could cost chiropractors thousands of dollars per year. Why does this happen to chiropractors?The unfortunate reality is that merchant service providers (MSPs) understand chiropractors bring in more revenue per customer than many other businesses. MSPs also know chiropractors may not have the time to research and shop for lower fees. And they charge more just because they can. While it may not seem like a big deal to pay an extra 1% or so on each bill, it adds up. The average chiropractic practice bills nearly $620,000 and collects almost $450,000 per year, according to a Chiropractic Economics survey. That means paying 1% too much in credit card processing fees can cost you $4,500 per year!Note: To calculate what you pay in chiropractor credit card processing fees, divide the monthly credit card processing fees on your MSP billing statement by the total monthly amount of your credit card payments. Now, if you own a chiropractic practice, you know the business aspect of your job is important. Increasing your margins means you can pay yourself and your associates more. And you have two ways to do that:
Reducing credit card processing fees, which are persistent, is actually one of the easiest, quickest ways to lower your expenses (and boost your margins). To make certain you’re not paying ridiculously high chiropractor credit card processing fees, here’s what you must consider
How many of your chiropractic patients pay with credit cards?
As a chiropractor, accepting credit cards makes sense for your bottom line.After all, many patients want to pay with a credit card. A 2018 TSYS survey found that 26% of consumers prefer to use credit cards for purchases, which makes credit cards more popular than cash but less popular than debit cards. For higher-value purchases, credit cards remain a preferred method of payment, given their consumer protections. The average chiropractic visit costs between $30-$200 with insurance, and around $125 per visit without insurance. This makes chiropractic services a larger-than-normal purchase most of the time, and therefore means your patients are more likely to use a credit card.
Also, consider that out-of-pocket medical payments have risen by 29% since 2015, according to a Black Book survey. After insurance (if applicable), chances are your patients will have to make an out-of-pocket payment. And there’s a high likelihood they’ll want to use a card to do so.
What about HIPAA-compliant credit card processing for chiropractors?
At NadaPayments, we get asked a lot about HIPAA compliance, as medical practices only want to use HIPAA-compliant credit card processors. This makes sense, considering you want to follow HIPAA regulations when handling sensitive patient information like their credit card data. But here’s the thing: HIPAA-compliant credit card processors don’t really exist. Payment processing falls outside the scope of HIPAA requirements and isn’t something you need to worry about when considering a payments processor. With that said, you should take precautions by:
Not providing protected health information (PHI): Only give the necessary information to process patient payments at your chiropractic practice.
Ensuring communications are protected: Your payment processor should not be sending receipts to your chiropractic patients via unencrypted email or text message.
As long as you take proper precautions, you don’t have to find a HIPAA-compliant merchant service provider.
What should you ask your chiropractic practice’s credit card processor?
Third-party credit card processing has largely gone unregulated, and that’s made the industry opaque. This makes it easy for MSPs to act unethically and charge higher chiropractor credit card processing fees (just because they can). To avoid being tricked and paying higher fees, ask the following:
What are the total fees? You want full disclosure on every fee to know the exact effective rate. The effective rate is the average of all your fees, which include:
pass-through rate (fee paid by MSP to the card-issuing bank)
interchange fees (paid to card-issuing bank)
assessment fees (paid to card brand)
Are there cancellation fees? Be insistent. MSPs can waive cancellation fees, even though they may claim they can’t.
Are there rate increases? Chiropractor credit card processing fees are a percentage of the bill and naturally rise with inflation. Any rate increase shouldn’t be considered “normal business practice”, even if your MSP claims it is.
Do I get credits when refunding a customer? If you have to refund a customer, your MSP should refund you some of the processing fees. These credits are known as pass interchange credits, and you should ask about them. Because your MSP may pocket that money if you don’t check.
What about Health Savings Accounts / Flexible Spending Accounts?
For chiropractic patients, paying with a health savings account (HSA), health reimbursement account (HRA), or flexible spending account (FSA) is common. If you’d like to accept these cards, let your MSP know the correct classification.In the merchant category codes (MCC), you’ll find that the code for chiropractors: 8041.
How much can you save in chiropractor credit card processing fees?
It depends. But it can definitely be a lot.In the example below, we take the average annual revenue of a chiropractic practice, assume 60% of payments are made with a credit card and use credit card processing fees of 2.9%. Here’s how much you’ll spend over 30 years:
Look at what you stand to gain if you can eliminate those credit card processing fees at your chiropractic service.
If you make around an average salary for a chiropractor, you can increase your yearly income by 3-6% if you keep just a portion of your savings from fees for yourself.
Overall, just think about what an extra $323,640 would get you:
More money to invest in your chiropractic practice: grow and expand your business
More personal financial security: use that money for retirement investments, student loans, you child’s college, and your mortgage (the median home costs around $200,000, which is less than these fees!)
A better quality of life: you’ll have more money for personal enjoyment (hello vacation!)
Fortunately, there is a better way—one that allows you to keep accepting card payments.
What a cash discount program can do for your chiropractic practice
With a cash discount program, you can not only prevent credit card fees from eating into your profits, but you can also avoid becoming a cash-only chiropractic practice (your patients don’t want that). Through a cash discount program, specialized merchant service providers set up your chiropractic practice with a unique credit card surcharge program. It’s 100% legal and compliant, and empowers your patients to select a payment method that’s convenient and affordable for them. Want to learn more about a cash discount program? Learn how we can set one up for you in less than a week. Click the button below or call +1 (929) 293-1800.