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 fee for every credit card payment you process, and sometimes for refunds. Depending on various factors (see below) the fee is somewhere between 2.5% and 5%.

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

  • 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. Fewer new potential clients will contact you if your competitors do accept credit cards.
  • There is a cost to carrying account balances on your books. Consider your time, effort and expense in following up with people who forgot their checkbook, needed an extension of payment because of cash flow, or didn't send a check along with their adolescent child whom you saw in therapy.
  • An unpaid balance can interfere with the therapeutic relationship. When a client owes you money, you are at risk for negative counter-transference, which can undermine your objectivity and effectiveness in helping the person.

Recent research suggests that not only do people tend to spend more when they use credit cards vs cash; they also focus more on the benefits (vs cost) when they use credit cards.

Thus, by accepting credit cards you offer more than convenience. Your clients will more likely focus on the value of your services than on the dollar amount they pay.

How to start accepting credit cards

First you'll need a merchant account for processing payments and depositing them into your checking account. Open a merchant account with your bank or through Costco, Sam's Club and other agents. If you don't want to pay for a card-swiping terminal (which can run several hundred dollars) you can process your payments online through Paypal Virtual Terminal or ProfessionalCharges.com

Check the terms of service. Although many credit card processors offer low transaction rates (say 1.6%) there may be additional monthly service charges, batch settlement fees and extra charges when someone pays us with a corporate or reward-type credit card. (Yes, it's the merchants, not the airlines who subsidize those frequent flyer miles!)

Also note how long it will take for payments to show up in your bank account. If cash flow is important to you, opt for the service that deposits your money within 24 hours.

Be cautious about entering into a contract. Read the terms of service to see if there is a grace period where you can cancel your contract without charge.

There are now options for no-contract no-extra-fee credit card processing. Square is gaining popularity among mental health professionals. It's a little square gizmo that fits into the audio jack of a smartphone or iPad, and works in conjunction with an app. Download the app and you're ready to swipe credit cards.

It's easy to use. Swipe the card, enter the amount charged, and the client signs with their finger on the screen. Fees are deposited into your account usually within 24 hours. They charge a flat fee of 2.75%, but there are no add-on charges for different types of credit cards.

Similar options to Square include Paypal Here and Intuit GoPayment.

Image courtesy of James Barker / FreeDigitalPhotos.net