If you don't accept credit card payments, you're probably losing money.

"What?" you may ask. "Doesn't it cost me money to accept credit cards?"

Well, yes and no. You do pay a small fee for every credit card payment you process, and sometimes for refunds.

However, there is also a cost to NOT accepting credit cards:

  • There is a cost to carrying account balances on your books. For various reasons some clients don’t pay at the time session – they forgot their checkbook, they’re short on cash, or they didn't send a check along with their adolescent child whom you saw in therapy. Consider your time, effort and expense in following up with these people, not to mention lost revenue from those who never return and don't respond to your requests for payment. Wouldn't you rather focus on your professional work rather than on chasing down unpaid balances?
  •  You may fill fewer appointment slots. Clients who don't have cash on hand for your services may either delay their next appointment or drop out of therapy with you. New clients who prefer to pay by credit card may decide to go to your competitor down the street. The competitor pays 3 percent to the credit card processor, but gets to keep 97 percent of the client’s payment, while your unfilled hours are earning zero.
  • An unpaid balance can interfere with the therapeutic relationship. When a client owes you money, you are at risk for negative countertransference, which can undermine your objectivity and effectiveness in helping the person.

When you accept credit cards, it benefits the public as well as you. You can be of service to more people – those who prefer to use a credit card (or medical savings account card) and those who need to use credit cards because of cash flow problems. They can get the help they need now rather than later. Their debt obligation is to the card issuer, not to you - which helps preserve the integrity of your clinical relationship.

How to start accepting credit cards and other electronic payments

First you'll need a merchant account for processing payments and getting them deposited into your checking account.

Just a few years ago your only option for a merchant account was through a bank or other financial institution. These are still available, and usually require signing a contract for two years or more (with a hefty early termination fee). You are typically charged a minimum monthly fee, plus a percentage of each transaction - which varies according to the type of credit card that is being used. If a client uses a credit card that earns airline miles or other rewards, the bank takes a higher percentage of the payment. Other charges may include a setup fee, bank fees, and transactions fees. You also need to purchase or lease a card swiping machine. This type of processing is best suited to businesses with high sales volume.

For your mental health practice, you may find it more practical and economical to swipe credit- and debit cards via a mobile card reader that fits into the headphone jack of your cellphone. Swipe the client's credit card through the slot in the card reader, and the payment is processed by an app on the cellphone. Companies that offer such card readers include Square, Paypal, and Quickbooks. There is no contract (other than agreeing to their terms of servicie). You pay a flat percentage per transaction, which is higher than what bank-affiliated credit card processors charge, but there are no monthy fees and no additional charges for reward cards.

Square and Paypal both have "chip" card readers that also process contactless payments via Apple Pay or Android Pay, using NFC (near field communication) technology. The client's credit- or debit card number is encrypted in their phone and payment is made through an app by simply holding their phone close to the card reader. These types of payments are considered to be more secure than a regular credit card.

Another option for credit card payment is a web-based account such as Professional Charges or IvyPay. These require you to enter clients' names and credit card numbers into their secure systems, but only the first time. The data is kept on file for future charges.

Before you decide on a credit card processor

Review the terms of service. The advertised benefits may have some restrictions. The fine print usually states how long it takes for credit card payments to be deposited into your bank account (e.g., 24 hours or 48 hours), and also addresses limits of the company's liability, policies about arbitration, HIPAA, refunds and chargebacks, and other issues that are not mentioned upfront.

Make sure the company can set you up to accept medical savings account cards. Clients who have funds designated for health services may not be able to use their MSA to pay you unless you are an authorized provider.

Compare the bottom-line cost to you. Percentages can be misleading. Over a year's time, a no-contract mobile credit card processor that charges a 2.75% flat rate may end up costing you less than a bank-based processor that advertises a 1.6% rate, once you add in all the hidden fees imposed by the latter.

What about passing on the cost of credit card processing to the client?

Many clinicians feel justified in passing on the cost of credit card processing to their clients. "I'm already accepting a discounted fee from the insurance company," they argue. "Why should I give up another 3%?"

Check your state law. In 10 states in the US it is illegal to add a surcharge ("swipe fee")  when customers use credit cards. This may change, however, after a recent US Supreme Court rules on a challenge to this law in New York; and appeals in other states are pending.

If you work in a state where it is legal to impose a surcharge, you must inform the client before doing so. Mastercard, Visa  and Discover require that you inform them in advance as well.

The above pertains to credit cards only. Nationwide, it is illegal to charge a swipe fee on debit cards and prepaid cards such as VISA gift cards.

In terms of professional ethics, none of the mental health professions' ethics codes prohibit imposing a surcharge on credit card payments. But as part of your informed consent agreement, you do need to let the client know about all aspects of payment, including any surcharges.


Even if passing on the cost of credit card processing to the client is legal and ethical, I don't recommend it. Since it's not the norm, people don't expect it. When they are charged a couple of dollars extra for using their credit card, they may feel nickelled-and-dimed - which can breed resentment and affect their treatment.

Therefore, it would be better to absorb the swipe fee as part of the cost of doing business, just as you do with coffee, tissues, magazines and other amenities for your clients.