Why should your orthodontic practice focus on what braces payment plan you offer?In short, because braces account for nearly 50% of revenues at orthodontic practices. That means that if you’re like the average orthodontic practice and bring in around $1.1 million in revenue, about $550,000 of that comes from braces alone. Clearly, a large part of your financial success (and the orthodontic industry’s in general) depends on offering braces to patients. That’s why when it comes to providing your patients with braces, you have to take the best possible approach to payments. After all, braces set your patients up for long-term success—shouldn’t they do the same for you? Because braces are such a big investment, your patients—and your business—depend on it.

Too busy to worry about payment processing?

We do understand that you're busy. And as an orthodontist, you’re doing important work. You take extra care to properly align and straighten your patient’s teeth and improve their dental health. From the initial consultation and X-rays to putting on the braces and doing checkups, you’re helping people live healthier, happier lives. But while you’ve been busy improving your patients’ oral health, you may not have realized something: Credit card processing fees are killing your orthodontic practice’s profits from braces. You may not be worried. After all, you only owe 3% on each payment in a braces payment plan. But it adds up much more than you might think. In fact, credit card processing fees could actually be costing you more than $10,000 per year. Got your attention now? Let’s take a look at why you need free credit card processing software and a better braces payment plan for your patients. Ultimately, we’ll show you how you can earn much, much more from the application of dental braces.

Why you need a better braces payment plan

First, answer this question: How much does an orthodontist make?Not sure off the top of your head? According to ZipRecruiter, the average salary for an orthodontist is $290,000. Considering that the average orthodontic practice brings in around $1.1 million in revenue, that means that you achieve net margins around 26%. That’s a solid income. However, you could be doing even better with a smarter braces payment plan in place.

Many patients pay for braces out of pocket

Let’s examine a couple more questions: How do your patients pay for their braces payment plans? Does insurance cover them?For those with insurance, dental plans usually cover around 50% of the cost of braces, according to Oral-B. However, not everyone has dental insurance, and most health plans don’t cover orthodontic services for those over 18 years old. So, it’s possible that only 20% of your revenue from braces comes from health insurance plans. The remaining 80% is paid for out of pocket. And of that 80%, most patients probably sign up for payment plans.

Credit card payments account for a lot of your revenue

Exactly how much of your revenue comes from credit card payments? Let’s take a closer look at the numbers:

  • If half of your orthodontist practice’s $1.1 million in revenue comes from braces, that’s $550,000.
  • If 80% of that revenue is paid out of pocket, that’s $440,000 in out-of-pocket payments.
  • If 65% of out-of-pocket payments are paid for with credit, that’s $286,000 in credit card payments.

It’s in this $286,000 in credit card payments that you’re losing money on braces payments plans. But how? Well, when a customer swipes their plastic each month to pay off their braces payment plan, you don’t get 100% of that revenue. The credit card companies get a sizable chunk of that payment. The following chart from ValuePenguin details the average card processing fees charged by different networks:

average credit card processing fees

Source: ValuePenguin

After adding in the merchant service provider (MSP) markup, it’s possible that you’re paying an average of 3.5% in credit card processing fees per transaction. Let’s do the math: If $286,00 of your revenue comes from credit card payments, then you’re paying $10,010 in credit card fees each year. That’s money that could be going toward payroll, equipment, marketing, or even your retirement fund.Luckily, you don't have to keep throwing that money away. Let’s take a look at how you can implement a braces payment plan that’s not only more profitable for your practice, but also more convenient for your patients.

Partner with a better merchant service provider (MSP) to set up a smarter braces payment plan

As mentioned above, once you add in the markup assessed by the merchant service provider (MSP), your average credit card transaction fee for a braces payment plan could be as high as 3–4%. This is why your orthodontic practice should shop around for the best payment processor available. You don’t want to simply find the cheapest one—you want one that offers low pricing and quality services. So, what services should you look for?Since many patients may go online to manage their braces payment plans, your payment system will need virtual terminal credit card processing. The actual hardware should have chip and contactless capabilities, as well.Of course, while you won’t need the same kind of speed as retail stores, your credit card system should operate efficiently. You don’t want something to stall when other patients are waiting. Finally, the payment system you choose should be designed for medical credit card processing. They’ll be able to accept debit cards associated with health savings accounts (HSA) and flexible savings accounts (FSA).

Understanding credit card processing fees

There are four types of fees you’ll pay when a patient swipes the card for their braces payment plan. These are:

  • The network fee (for the payment network): Visa wants their cut.
  • The interchange fee (for the card-issuing bank): JPMorgan Chase wants some cash.
  • The assessment fee (for the card-issuing brand): If your patient has a travel rewards card, for example, Delta Airlines will take a little too.
  • The MSP markup (for the payment processing company): Think Square.

When you set up a braces payment plan for a patient, and then the patient pays with a credit card, you’re not going to get 100% of that revenue. 3% or more will have been snagged by the time the payment reaches your account. As you shop for an MSP, narrow down your choices to those who offer low, transparent pricing. You should opt for pass-through pricing, which allows you to see what your fees will be, instead of tiered pricing. Tiered pricing organizes transactions into categories, and you often end up paying more than expected. Filter your selection down to the best three MSPs for your orthodontic practice. Then, you can move onto the next step.

Negotiate pricing with your MSP

What? You can negotiate pricing on credit card processing fees? Well, somewhat…You can’t negotiate the network fee, assessment fee, or interchange fee. You can, however, negotiate the MSP markup and ask for discounts on things like hardware fees and subscription costs. And if you have good revenue (which, as an orthodontist, you likely do), chances are the MSP will be willing to drop 5–10% off their markup. Over time, that simple negotiation could save you thousands of dollars. How amazing is that? Now, even with the best possible MSP and a discount on their markup, you’ll still have to pay credit card transaction fees. But there’s a way to completely eliminate those fees and start taking home 100% of your revenue from braces payment plans. Let’s take a look at this simple yet powerful strategy now.

The credit surcharge program: Take home 100% of your braces payment plan revenue

Want to get rid of credit card transaction fees forever? Enter the credit surcharge program—a payment strategy that businesses can use to offset transaction fees. Here’s how it works:

  • A patient gets braces and decides to start a braces payment plan with your office.
  • Thanks to the Dodd-Frank Act, your orthodontic practice can structure payments to eliminate the impact of credit card processing fees on your bottom line.

You do this by:

  • Charging the sticker price, if the patient pays with cash or debit card (you pay a fee of 1% plus $0.25 per transaction for debit card payments).
  • Adding up to 4% to the bill if the patient pays with a credit card. At Nadapayments, for example, our solution adds 3.5% to credit card payments. That extra 3.5% covers the processing fee, ensuring that your practice sees all of its revenue from the braces payment plan.
  • Providing clear signage at the door and point of sale explaining your surcharge program pricing.

At your orthodontic practice, a credit surcharge program gives braces patients the chance for savings by paying with cash or debit card. If they want the convenience of the credit card, they can pay that way as well. There’s just a 3.5% surcharge. It’s as simple as that. And because of this simple strategy, your orthodontic practice could take home $10,000+ more in revenue each year.

Ready for free credit card processing?

With the right MSP and a credit surcharge program, you can increase your orthodontic practice’s profits and keep all of the revenue you earn from braces payment plans. All you have to do is take action with a few easy steps. With our credit surcharge program at Nadapayments, you can get free credit card processing set up within one day. We don’t charge any fees and work with your credit card installment plans.Want to get started? Call us at +1 (929) 293-1800 or click the link below. We’re ready to help your orthodontic practice stop losing money to unnecessary fees.

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