If you are seeing some or all of your clients remotely, it is good business to process payments electronically, rather than via cash or check. There is a small fee for electronic payments, but the process is efficient and funds are usually deposited into your checking account within 24 hours.
Here are a few ways to receive electronic payments:
Credit card merchant account
In order to process credit card payments, you need to set up a merchant account with either a financial institution or a payment processor such as Square, Stripe, or Ivy Pay.
What to look for
Contracts: Several years ago, when merchant accounts were available exclusively through financial institutions, your only option was to sign a contract for at least two years, with a hefty early termination fee. However, newer payment processors such as Square and others require no contract.
Fees: Each time you process a credit card payment, you are charged a percentage of the amount collected. In addition, there may be a transaction fee. Merchant accounts set up with a contract through banks may charge slightly lower percentages, but they may also require you to use their proprietary equipment or software for an additional fee. Many charge higher percentages when your clients use credit cards that earn miles or cash rewards.
Services such as Square and Ivy Pay charge around 3% (regardless of the type of card) plus a small transaction fee, and some processors charge about one quarter percent more for transactions where the client's card is not physically present - such as when you key in the numbers manually.
Types of cards processed: Most payment processors accept all major credit and debit cards. But some clients have special cards dedicated to a health savings account (HSA) or a flexible spending account (FSA) for medical expenses. In order to process such cards you may need to fill out a separate application with the payment processor.
Zelle enables electronic transfer of funds from one person's bank account to another person's account, and is processed within a few minutes via a mobile app. These accounts need not be at the same bank, but both you and the client must have accounts at a bank that uses Zelle, and you both need to enroll in Zelle payments.
It works similar to a debit card, but there is no need to enter a card number. The client just needs your email address or cell phone number to transfer funds from their bank account to yours.
There is no charge to transfer money from one individual to another via Zelle, but some banks may charge a percentage if you are you using Zelle for business transactions.
Popmoney works similarly to Zelle, but there is a transaction fee of 95 cents, and the transfer of funds takes longer - up to 3 days.
A Paypal Business account enables you to accept payments directly from a client's personal Paypal account. Thus, clients who don't have a credit card or who are maxed out on their credit cards, can send you an electronic payment from their Paypal account to yours, provided that they have sufficient funds in their account. Paypal also gives them the option to pay by credit card. Regardless of whether the client pays directly from their Paypal account or via their credit card, Paypal charges you a small percentage of their payment.
Venmo, which is owned by Paypal, is a type of digital wallet. Like Paypal, Venmo is a stand-alone account that can retain a cash balance, and is linked to the account holder's bank or credit card. If your business accepts Venmo payments, you will be charged a percentage similar to credit cards, and if the client is using a credit card they may be charged as well by Venmo.
Other digital wallets include Apple pay, Google pay, and Samsung pay, but they are device-specific. Thus, if you want to collect payments through these apps you will need to sign up for each of them in order to accommodate clients with different types of devices.
Practice Management Software
Many practice management software programs, such as TherapyNotes, SimplePractice and Theranest, include a client portal where you can receive credit card payments from clients. You will be charged a percentage of the payment, similar to other credit card processors.
Are credit card & electronic payments HIPAA-compliant?
HIPAA refers to protected health information (PHI), such as diagnosis and treatment details. If you are using an independent payment processor that has access only to the client's name and amount paid, then this is not PHI, and HIPAA does not apply. It is essentially the same level of disclosure as depositing the client's check into your bank account.
However, if the payment processor has access to other client information, such as diagnosis, treatment notes, procedure codes, etc. - as is the case with practice management software - you will need a business associate agreement (BAA). If a BAA is not offered to you at sign-up, inquire about it.
Tips to maximize prompt payment
When you process a client's credit card by entering the numbers manually at the end of a session, prompt payment is assured - assuming that you entered the numbers correctly, and that the card is valid and not maxed out.
For payments via check, electronic transfer, or the client portal at your practice management web page, you will need to depend on the client to initiate the payment. Most of the time this will not be a problem. However, with people who repeatedly need reminders, you might consider asking them to pay in advance.
This is not illegal or unethical, as long as it does not discriminate against a legally protected class, such as race, religion, ethnicity, or disability.
If you do decide to institute a policy for payment in advance, include a statement to that effect in your informed consent document, and the circumstances under which it may be invoked. In the same section of your informed consent, you may also want to state that except for emergencies, if pre-payment is not received X number of hours or days prior to the session, the session will be canceled and not rescheduled until payment is received.
What about keeping the client's credit card info on file?
From a strictly legal standpoint, you should not store clients' credit card information on paper or in an electronic document unless you follow PCI DSS compliance rules, which are which are quite complex and expensive to implement. However, companies like Square, Ivy Pay and practice management software are usually compliant and can store credit card info for you legally and securely.
In any case, you should have clients sign an authorization form (such as this one from Square) to have their credit card information on file. You should also inform them prior to entering each charge, and also send them a receipt.