Whether you’re a cosmetic dermatologist, plastic surgeon, or cosmetic dentist, medical payment processing can be a headache. Your priority is to provide top-notch medical care to your patients; details like how you process payments can be easily overlooked. That’s perfectly understandable. However, it’s really worth it to take a portion of your day to review your medical payment processing software. Here’s why: The wrong credit card processing system could affect your practice’s financial sustainability.How so? Well, chances are, you’re paying 3% or more in fees on each credit card transaction (along with other charges). That means you’re letting credit card fees cut into your medical practice’s pocketbooks.Furthermore, given the sensitive nature of healthcare services, protecting patient data is of the utmost importance. Partner with the wrong medical payment processing provider, and you risk losing everything. Simply put, you should view medical payment processing as a vital component of running a successful healthcare practice. In this guide, we’ll cover how using better healthcare payment processing can make your practice more secure and profitable. We’ll also discuss how to implement the best credit card processing for your medical practice in a few easy steps. Let’s get started.

Why you need better medical payment processing: the cosmetic dermatologist example

If you’re a cosmetic dermatologist, here’s why you should search for better medical payment processing:

  1. You’ve invested a lot of time and effort to get to where you are. You did four years of undergraduate study, then four years of medical school. After that, you did three to four years of residency. All said and done, you’ve devoted at least eleven years to your profession.
  2. You’ve also invested a lot of money into becoming a cosmetic dermatologist. You may even have student debt: According to NerdWallet, the average medical school debt nears $202,000.
  3. Opening a cosmetic dermatology office wasn’t cheap, either. Based on industry research, you likely spent anywhere from $70,000 to $100,000 (though it could be more or less based on the size of your practice, its location, and other factors).

As you can see, you’ve put it all on the line to become a cosmetic dermatologist. Why lose your hard-earned money just because you don’t have the right medical payment processing? But just how much money are you losing? Let’s take a look.

Bad payment processing can cost you $25K+ per year

To continue with the above example, let’s say:

  • You’re a cosmetic dermatologist with your own practice. Your practice generates $1.2 million in annual revenue (which is solid for your profession).
  • Let’s say your profit margins are 28%, which means you bring in $336,000 (just below the national average for dermatologists). That’s great—but you could be doing even better.

Since cosmetic dermatology procedures typically aren't medically necessary, insurance companies usually don’t cover them. That means your patients pay out of pocket for your services. So, how exactly do your clients pay? Well, considering that your services as a cosmetic dermatologist range in price from $75 (for services like microdermabrasion) to $2,500+ for Thermage, the chances are that your clients prefer to pay in installments and with a credit card. As research from the Federal Reserve notes, credit card usage rates increase as price does. Therefore, it’s possible that as much as 60% of your revenue comes from credit card transactions. That’s $720,000 from clients swiping plastic! This is why your medical payment processing system is so important: You’re paying fees on all of that $720,000.Take a look at average credit card processing fees below:

credit card transaction fees


Add in what you pay your medical payment processing provider, and the transaction fees you’re paying probably reach 3.5%, on average. Paying a 3.5% fee on that $720,000 means forking over $25,200 per year in transaction fees! That’s unacceptable. Just think what would happen if you got free credit card processing. Your salary would jump $25,200 (7.2%, in this example). You may be thinking, “Free credit card processing? That’s impossible!” But that couldn’t be further from the truth. There’s actually a strategy you use—and it’s easier than you might think.

The strategy to get free medical payment processing

Let’s face it. Not all medical payment processing companies are good. Given the lack of regulatory oversight in the payments industry, merchant service providers (MSPs) can be vague about their fee and pricing structures. And that usually leads to you paying more. But the good news is that there are plenty of good merchant service providers out there. You just have to do your research and choose them carefully. When shopping for a medical payment processing provider, follow the process below. It will help you narrow your selection down to only the best processors for your practice.

Only go for those that offer pass-through pricing

There are two types of pricing for credit card processing:

  • Tiered pricing
  • Pass-through pricing

With tiered pricing, credit card payments are separated into tiers. You (the merchant) pay more for ‘unqualified’ rates and ‘mid-qualified’ rates, while ‘qualified’ rates are the cheapest. The problem with tiered pricing is that it’s hard to predict how a transaction will be classified (and, as a result, what you’ll pay). Too often, transactions fall within the more expensive tiers, meaning you’ll pay more. With pass-through pricing, you’re billed by the medical payment processor based on a fixed fee, plus a markup. It’s way more transparent, and almost always cheaper. So, the first step to finding the right payment processor is to avoid those that offer tiered pricing. Opt instead for medical payment processing companies that use pass-through pricing.

Select those with the services and capabilities you need

Pricing isn’t everything, however. You can’t just go with the most affordable medical payment processing system. You need a processor with flexible software that enables your patients to make payments in a variety of ways. Your medical payment processor should offer these types of payment methods:

By giving your clients convenience, you ensure that you get your revenue faster. In addition to pass-through pricing and top-of-the-line features, you’ll want a medical payment processor with excellent data security. Whether you’re a cosmetic dermatologist or a plastic surgeon, the services you provide your patients with should be kept private, and personal and financial data shouldn’t be vulnerable. Confidentiality isn’t just important to your clients—getting hacked could be devastating to your business. Furthermore, you should look for providers whose software can be upgraded. This way, you don’t have to continuously buy new hardware, and payments can be processed in as efficiently as possible at all times. After reviewing a list of medical payment processors with these criteria in mind, eliminate those that don’t meet your needs. Then, move on to the next step.

Analyze the credit card processing fees

You’ll pay the following fees for medical payment processing:

  • An interchange fee, which is paid to the card-issuing bank
  • A network fee, which is paid to the payment network
  • An assessment fee, which is paid to the card-issuing brand
  • A processor markup, which covers hardware, software, etc.

Since your list of processing companies already includes only those with the capabilities you need, you’ll have to examine each company’s total fees and narrow it down to the three best processors for your practice. Then, you can get in touch with them and negotiate!


Wait, what exactly can you negotiate? While you can’t tell a medical payment processor that you’d rather not pay the interchange fee or network fee (Bank of America and Visa want their money, after all), you can get a discount on the processor markup. We’ve seen medical practices get 5–10% off the processor markup. Over time, that can save your practice tens of thousands of dollars. After negotiations, go with the most affordable payment processor who provides all the capabilities and services you need. Now, you may be thinking, “I’m still paying medical payment processing fees. Where does the free credit card processing come in?”There’s just one thing left to do…

Implement a credit surcharge program

Thanks to the Dodd-Frank Act, you can implement a credit surcharge program completely legally. As its name suggests, a credit surcharge program involves having your clients cover payment processing fees. With Nadapayments’ credit surcharge program, for example, clients at your cosmetic dermatology office would pay an extra 3.5% if paying with a credit card. This would offset the impact of credit card fees on your business.You may be wondering, “Won’t this upset my clients?”Actually, it won’t. This is because you’ll give them the option to pay with cash or a debit card and save money by not paying a fee. This way, they have the option of saving money or the convenience of swiping their plastic. Of course, you want to be transparent about your surcharge program. At Nadapayments, we set up cosmetic dermatologists, plastic surgeons, and others with clear signage at their doors and points of sale. This tells clients right away about the opportunity to save by paying with cash or debit. With a surcharge solution, your bottom line won’t feel the impact of medical payment processing fees. As a result, you’ll have completely free credit card processing. How wonderful is that?

Ready for free medical payment processing?

At Nadapayments, we’re ready to help you get rid of healthcare credit card processing fees for good. Our surcharge solution integrates seamlessly with your credit card installment plan. And we can get you up and running—and taking home more of your revenue—within just one day. Whether you’re a cosmetic dermatologist, plastic surgeon, or cosmetic dentist, the time to take control of patient payments is now. Call us at +1 (929) 293-1800 or click the link below. We’re ready to help you take home 100% of your revenue.

I Want FREE Credit Card Processing