Home Care Services Company Reduces Monthly Credit Card Fees by $1,000

Fact: Consumers in the United States are increasingly using credit cards to pay for medical expenses. According to MSN Money, up to 27 million American are putting medical expenses on credit cards, costing consumers an average of $471 a year.

A big part of this is due to the rising costs of health care in the US. As Peterson-Kaiser points out, “since the end of 2007, healthcare prices have grown 21.6%, while prices in the general economy (measured by the GDP deflator) have grown 17.3%.”

The data tells us that with rising healthcare costs, it’s likely that the number of consumers who use their credit cards at medical facilities will continue to increase. That’s why if you’re running a medical-related business, it’s important to give patients the option to pay using their cards.

Finding the right merchant account for your home care business

Enabling credit card payments in your business starts with selecting a merchant account or payment provider. This process involves a series of steps including:

Now, one of the most important steps in this process is selecting a provider which offers the best rates. Credit card processing fees for home care businesses can costs hundreds, if not, thousands of dollar per month, so you want to make sure that you’re not paying more than you have to.

In this post, you’ll learn how Minute Women Home Care, a facility that focuses on senior women, added $12,000 in annual profits simply by choosing a better credit card processor.

Meet Minute Women Home Care

Ryan McEniff’s aunt ran the company she founded, Minute Women Home Care, for three decades until she retired in 2001. Her staff kept the business going for another ten years at about a breakeven point when McEniff stepped in to buy the Lexington, Massachusetts firm in 2011.

Minute Women Home Care

Ryan and family

With a new generation of ownership most businesses find new ways to manage and, one hopes, achieve higher profitability. Better yet, they provide expanded customer services to meet evolving needs.

The fact is that home healthcare is an industry on the rise. It’s a way to contain costs for convalescence and eldercare: According to industry analysts, a month in a skilled nursing facility typically costs about $12,000. Homecare can run as little as $1,200/month. This varies by services and the condition of the patient, but the push is on to keep more ill and elderly patients at home as long as possible with the assistance of nurses, therapists, house cleaners and respite caregivers.

From a payments standpoint, McEniff says that between 60% and 70% have moved away from paying by check to using credit cards. “More and more people are using credit cards,” he says. “I think it’s easy to see we are moving to a cashless society, and people are very comfortable with credit cards because they are easy.  They leave them on file with us and we charge them as needed.  Additionally, credit cards provide a cash back or points for things they are paying for already.”

McEniff’s experience is not uncommon: As we pointed out in the beginning, credit card use in the healthcare industry is on the rise, so by not accepting credit cards, you are going to lose a large chunk of the market.

Why they switched credit card processors

Since acquiring the company five years ago, McEniff realized he needed a new merchant company to reduce his credit card processing fees.

“We were getting charged 10% or more,” he says. A business colleague found for him a processor that charged a 3.5% rate that provided a substantial savings over his existing merchant account provider. “But I quickly realized I was still giving away too much. So I searched for a few weeks and found Payment Depot.”

Payment Depot offers pricing in several packages, but all are set to a per-transaction cost plus monthly or annual fees, not a percentage of the transaction (plus interchange rates charged by all processors). For example, Payment Depot’s most popular rate is $0.15/transaction with either a $49/month or $399/year membership fee, available to businesses that process up to $40,000 in transactions per month. The fact of the matter is that small business credit card processing fees vary from those of larger companies and even similar-sized companies with different per-transaction prices (For more on pricing see here.)

McEniff approached the Payment Depot pricing fees and service levels with healthy skepticism. So much so, that he kept the predecessor merchant services company that charged 3.5% for a few months while trying out Payment Depot. “I felt this [Payment Depot] was too good to be true,” he says. “I needed a parachute in case Payment Depot didn’t follow through with what they said they were going to do. In the end I was charged $300 by my old processor for breaking my contract, yet I still saved over $1,000 that month by making the switch.”

Minute Women Home Care now gets a boost to its annual profits of about $12,000 – all from the simple switch to Payment Depot as its credit card processor.

Beyond pricing, McEniff is equally satisfied: “My last processor and Payment Depot’s customer service were both outstanding,” he remarks. “Really what it comes down to is reliable service, depositing money on time and making sure the rates are fair.  So far, I have yet to have an issue that has come up.  Everything works as they said it would.”