Navigating the Challenges of Veterinary Payment Processing

Veterinary clinics face many challenges beyond caring for animals. One significant aspect is payment processing, a critical function for any practice. Efficient payment processing ensures that the practice runs smoothly and continues to provide excellent care for pets. However, high transaction fees, disputed charges, and the necessity of maintaining PCI compliance can eat into profits and take staff away from customer-facing activities. This blog explores these common challenges and offers insights into navigating them effectively.

High Transaction Fees

One crucial factor impacting veterinary payment processing is the high transaction fees charged by payment processors. These fees can significantly impact a practice’s bottom line, especially for small and medium-sized practices. 

Reasons for High Transaction Fees

• Credit Card Processing Costs: Businesses incur fees for every credit and debit card transaction accepted. The card brand, issuer, and payment provider share the total amount collected. Fees vary based on the card brand (Mastercard, Visa, etc.), card type (rewards, signature, commercial, etc.), acceptance channel (in-person, online, phone), and merchant segment. 
• Interchange Fees: Banks and card networks charge Interchange fees, a significant component of overall transaction costs. These fees can add up for veterinary practices due to relatively high average transaction amounts.
• Additional Service Fees: Most payment processors charge extra fees for account maintenance, risk fees, network access fees, PCI fees, monthly minimums, and statement fees. While some fees are legitimate and help pay for services, many processors hide markup or charge unnecessary fees.

Strategies to Mitigate High Transaction Fees

• Negotiate with Processors: Veterinary practices can often negotiate better rates with their payment processors. It’s worth comparing different processors to find the most competitive rates. Submit your current statements for statement analysis and ask for a savings calculation, including all extra fees.
• Inquire about Interchange-plus Pricing: Many providers bundle transactions into “tiered” or “flat” pricing, which is simple to understand; however, savings are missed and you have no visibility into actual rates. Interchange-plus is based simply on the card brands’ wholesale cost for the transaction, plus your provider’s markup. Businesses on this rate plan obtain clear, itemized merchant statements that list the Interchange rate and markup separately.
• Encourage Debit Card Use: Encouraging clients to use debit cards instead of credit cards can help lower transaction costs since debit cards typically incur lower rates.
• Offer ACH Payments: ACH payments are often cheaper than credit card transactions. Encouraging clients to use ACH for larger payments can reduce overall transaction costs.

Disputed Charges and Chargebacks

Disputed charges can result in chargebacks, a significant challenge for veterinary practices. Chargebacks occur when clients contact their bank or card issuer to challenge a transaction. If the business can’t prove the charge was legitimate—or doesn’t respond to the request promptly—the funds are credited to the client, resulting in fees and lost revenue for the practice.

Common Causes of Disputed Charges

• Client Dissatisfaction: Clients may dispute charges if they are unhappy with the service or if there is a misunderstanding about the cost.
• Fraudulent Transactions: Stolen or compromised payment information can lead to fraudulent transactions, resulting in chargebacks.
• Billing Errors: Mistakes in billing, such as incorrect charges or duplicate transactions, can also lead to disputes.

Reducing the Risk of Disputed Charges

• Clear Communication: Ensure clients are fully informed about costs and services before treatment. Providing detailed estimates and obtaining written consent can help prevent misunderstandings.
• Robust Fraud Prevention: Implement strong security measures such as EMV and AVS to protect client payment information and reduce the risk of fraudulent transactions.
• Accurate Billing Practices: Double-check all billing entries and ensure that charges are correct and appropriately authorized.

Maintaining PCI Compliance

PCI DSS compliance is critical for any business that handles credit card payments. Maintaining PCI compliance is essential for veterinary practices to protect client data and avoid costly fines and penalties.

Components of PCI Compliance

• Secure Payment Systems: Use secure payment processing systems that comply with PCI DSS requirements, including encryption and tokenization, to protect cardholder data.
• Access Control Measures: Implement strong access control measures to ensure only authorized personnel can access sensitive payment information.
• Regular Security Testing: Conduct security and vulnerability assessments to identify and address potential security weaknesses.
• Employee Training: Educate staff on PCI compliance requirements and best practices for handling payment information securely.
  
  

Steps to Lower the Complexities of PCI Compliance

• Use a Cloud-Connected Solution: Minimize the amount of cardholder data passing through or stored on your systems and networks by connecting to a processor in the cloud.
• Work with a PCI Level 1 Payment Service Provider: Organizations that process more than 300,000 credit card transactions annually use the latest security technologies to protect cardholder data. You can search Visa’s Global Registry of Approved Service Providers to validate Level 1 compliance status of payment processors.
• Complete the Self-Assessment Questionnaire (SAQ): Most veterinary practices can demonstrate PCI compliance by completing a Self-Assessment Questionnaire (SAQ) and submitting it to their payment processor. 
• Implement Necessary Changes: Make necessary changes to your payment systems and processes to ensure they meet PCI DSS requirements, including upgrading software, enhancing security measures, and updating policies and procedures.
• Monitor and Maintain Compliance: PCI compliance is an ongoing process. Regularly review and update your security measures and ensure employees remain informed about compliance requirements.

Spend More Time on What You Love

Navigating the challenges of veterinary payment processing requires a strategic approach to managing transaction fees, minimizing disputed charges, and maintaining PCI compliance. Working with a partner like PayJunction that offers transparent pricing, outstanding customer service and the highest security standards will save you money and improve the payment experience for staff and customers.

What other challenges do you experience when taking payments? Tell us below, we’re happy to address your concerns.