Increasing Credit Card Processing Costs: Why and What You Can Do


ave you noticed that the cost to process your patients’ credit cards is increasing faster than your card sales are? If so, you’re

not alone! Do the math on a recent state- ment: fees divided by dollars processed = effective rate. In 2019, for the first time ever, the average dental office was paying more than 3 percent in fees to run their credit card sales, compared to Best Card’s national aver- age effective rate of 2.18 percent.

Best Card is the newly endorsed credit card processor for the MDA, which joins more than 30 other dental associations or their affiliates who also endorse Best Card. Best Card works with thousands of dental offices nationwide and has completed thousands of cost comparisons for dental offices looking to save money for their practices by changing card processors.


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

While many dental offices are great at asking questions and negotiating fees when they join a company, often it’s not something that they continue to keep an eye on. Many dentists don’t realize that any credit card pro- cessor can increase your costs above what’s on your signed contract at any time if they include notice in the fine print of monthly statements. Many companies introduce increases three to four times each year and often charge high termination fees, making

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MDA is pleased to announce Best Card as its new endorsed company for credit card processing! Get your analysis today!

it prohibitive to leave prior to the contract end date.

Increased costs can come from straightfor- ward rate increases or through the introduc- tion of new “junk fees” and/or surcharging on top of legitimate fees that are usually passed through at cost. Because credit card process- ing is very detailed, it can be difficult to tell where extra costs are being incurred. How- ever, you’ll see the result on your monthly bill. A great deal when you signed up a year ago may be much more expensive now.

Best Card’s cost analyses show that credit card processing solutions that are integrated into dental software, as well as those from big bank providers, tend to be some of the most expensive options we see dental offices paying.


If your processor has you on reasonable pricing, the largest factor in what your credit card processing fees are should be the type of card your customer is paying with. For example, debit cards from big banks are the cheapest types of cards to process (no PIN required) but a corporate rewards card with substantial perks for the cardholder is much more costly!

Insurance payments made via virtual cards (VCC) sent to your office to hand key tend to be some of the most expensive card types, increasing the average costs of credit card processing. This can be difficult to absorb, especially if you already have tight margins on reimbursement rates from insurance companies.

Last year the MDA passed language that gave providers the right to choose a reimburse- ment method that does not include a fee. Thus, you can refuse a VCC reimbursement and request a paper check or Electronic Funds Transfer (EFT) to direct deposit insur- ance payments to your bank account at a substantially lower cost than the 2.5 percent to 3 percent rate charged by most VCCs.


Some credit card processors are very aggres- sive in marketing surcharge, or “cash dis- count” solutions that surcharge credit card transactions, so customers pay the credit card processing fee. Many practices find that this is not a good solution for a variety of reasons:

• Huge increase in overall cost: Most pro- cessors offering these services charge a 4 percent 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 pro- cessor’s profit margin. If you were to increase your own costs by 4 percent, you would benefit from the increase instead of the credit card processor, and fewer patients would probably notice the increase.

• Cards issued for payment by insurance companies will not allow a surcharge: VCCs are issued with an exact balance, so you’d likely end up paying the inflated surcharge rate out of your own pocket.

• Patients hate it: Recent customer surveys showed that people who were surcharged for credit card transactions had a very negative feeling towards the

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