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Credit Card Processing – Cost-Plus Vs. PMS Integrated Processors

A newsletter subscriber and a friend asked whether we still like cost plus credit card processing. Cost plus means that we as the merchant pay the exchange rate which is the payment to Visa, MC etc. for the use of their network, plus a small mark up for the processing company. The system is not 100% transparent but it is far more transparent than a traditional arrangement where the processor basically charges whatever fee it wants. Our friend said that his effective rate with his current cost-plus provider is 1.8% whereas if it would be 2.6% if he switches to the Processor integrated into his practice software.

Are the savings of $5,000+ worth foregoing the convenience of using the integrated processor? They would be to us! Your practice is not high volume business like McDonald’s processing hundred of transactions per day. You may only have 200 transactions per month which is only 10 per day. The incremental time your staff saves is negligible – which is the opposite of what the PMS and marketing literature will likely tell you.