Understanding Payment Processing Pricing Models: What’s Best for Your Practice?
In the complex world of credit card processing, not all pricing models are created equal. As a healthcare provider, choosing the right one can save you thousands each year. Let’s break it down:
Least Transparent. Often most expensive.
Simple, but you lose cost savings.
Most Transparent. Most cost-effective.
How it works:
A single percentage fee for every transaction, regardless of card type or method.
Processors bundle transactions into 3–6 “tiers” (e.g., qualified, mid-qualified, non-qualified).
You pay the true cost (interchange + card network fees) plus a small fixed markup.
What you pay:
Easy to understand (e.g., 2.75%) — but oversimplified.
A set rate depending on the tier, often not transparent.
Transparent and itemized costs — you see exactly where your money goes.
The catch:
You pay the same for high rate on low-cost debit cards as you do for expensive reward credit cards.
You rarely know how your transactions are categorized — and processors often assign many to the most expensive tier.
You benefit from lower-cost transactions, like debit and HSA/FSA cards, which are common in healthcare.
Least Transparent. Often most expensive.
How it works:
A single percentage fee for every transaction, regardless of card type or method.
What you pay:
Easy to understand (e.g., 2.75%) — but oversimplified.
The catch:
You pay the same for high rate on low-cost debit cards as you do for expensive reward credit cards.
Simple, but you lose cost savings.
How it works:
Processors bundle transactions into 3–6 “tiers” (e.g., qualified, mid-qualified, non-qualified).
What you pay:
A set rate depending on the tier, often not transparent.
The catch:
You rarely know how your transactions are categorized — and processors often assign many to the most expensive tier.
Most Transparent. Most cost-effective.
How it works:
You pay the true cost (interchange + card network fees) plus a small fixed markup.
What you pay:
Transparent and itemized costs — you see exactly where your money goes.
The catch:
You benefit from lower-cost transactions, like debit and HSA/FSA cards, which are common in healthcare.