ABC's of Credit Card Processing

If you’re checking your monthly bills, you know that credit card processing fees are complicated to decipher, and expensive. With just a little information, you’ll be able to understand where the costs come from and what they should be.

What Should it Cost?

Let’s take the voodoo out of it and simply calculate your effective rate. This is what you are actually paying to process credit cards. On a recent statement, add all fees charged and divide that by all the dollars processed. Example: $650 in fees ÷ $20,000 processed = 0.0325 or 3.25%. Best Card’s average dental office pays an effective rate of 2.18%, which means they pay just $2.18 to process $100 in sales. If your effective rate is higher than this, you may be paying too much!

Understanding the Basics

When you process a card, there is an exact fee paid based on the type of card and the method in which the payment was processed. This cost is the Interchange Rate and is the exact cost that all credit card processors pay. There are almost 1,200 different Interchange rates. All processors have this same “price floor” – it is what is charged on top of this where processing companies compete. Still, there are specific things that you can do to limit your Interchange costs and save money, including:

Debit: Have your staff ask for debit cards:

  • there’s no risk to the card company they won’t pay their monthly bill and there are no rewards to pay
  • Debit card fees can cost a fraction of credit card fees.

Card Present: Swipe or read chip rather than hand-keying in cards for the lowest rates. If the card is present, there is a lower risk of fraud which results in the lowest possible transaction cost for all card types.

  • When you must key in cards, make sure to enter street # and zip code associated with the card to avoid additional fees and receive a lower rate.

Get compliant! PCI Security Council mandates annual self-assessment questionnaire (SAQ) completion, as well as quarterly network scans if using ethernet/online systems.  Best Card strives to maintain >90% compliance. We prepare thousands of cost comparisons and see processors charge $18.95-$39+ per month in non-compliance fees on approximately 70% of analysis requests. 

Pricing Models

Just because all credit card processors have the same costs doesn’t mean that they charge their customers the same price for their services. Here are a few popular pricing models:

Interchange Plus: Processor passes through all card costs and surcharges a fixed percentage. We are seeing more processors (especially those integrated into dental software) with surcharges to some or all cards to boost their profit. Best Card offers any ADA member Interchange + 0.30% + $0 per transaction, significantly below the industry average.

Tiered: Processor ‘buckets’ all 1,200 cards (see above Interchange) into 3-6 “Tiers” based on similarly priced cards. Some processors may have a base rate and surcharge for “non-qualified” cards that have higher Interchange cost. If you see Qualified, Mid-Qualified or Non-Qualified on your statement you’re likely on tiered pricing.

l  Flat rate: Processor charges one fee for all cards (or sometimes a card present fee and a more expensive card-not-present fee). These rates can be very high because they have to make sure the processor isn’t losing money if there are many transactions on high-cost cards.

Convenience Fee: While there are a couple variations, this involves having your patients pay the fee for accepting cards, generally at rates well above your normal cost. This not only has extensive reporting requirements with the card brands, but many states do not allow passing a surcharge onto the customer. Patients tend to respond negatively.

Which Pricing is Best?

While any can be competitive, Interchange and Tiered are usually the most competitive pricing methods, assuming you have an ethical processor. If your processor is looking for ways to boost their profit at your expense, then any system will be more to their benefit than yours.

It’s About Whom You Work With!

Best Card is endorsed by ADA Member Advantage and more than 40 state dental associations (or their affiliates) for credit card processing because we provide excellent customer service, offer exclusive rates for endorsing association members, and are committed to keeping costs low for dental offices. The average dental practice saves $4,221 (24%) annually. We also have software options that automatically post payments into popular dental software programs. Why not see what Best Card can save your practice? Email or fax a recent statement to or 866-717-7247. Questions? Call 877-739-3952 or visit us online.