Key takeaways
- Use total fees divided by processed sales as a starting effective-rate calculation.
- Separate card-network costs, processor markups, monthly fees, equipment, and exception charges.
- Compare multiple months so seasonality, refunds, and one-time fees do not distort the result.
- Review contract terms and operational fit—not only a quoted headline rate.
Gather the right documents
Start with three recent merchant statements and the current processing agreement. If the practice has multiple merchant accounts, terminals, locations, or online gateways, gather a statement for each account.
Redact full account numbers, tax IDs, bank information, and other sensitive data before sharing statements for review. The goal is to analyze pricing and transaction patterns without exposing credentials.
Calculate the starting effective rate
Divide the statement's total processing-related fees by total processed sales for the same period, then multiply by 100. This produces a blended percentage that can be compared month to month.
The number is a diagnostic starting point, not a complete verdict. Refunds, chargebacks, keyed transactions, card mix, monthly minimums, equipment leases, and non-processing charges can all affect the result.
- Processed sales volume
- Number of transactions
- Average ticket size
- Total fees
- Refund and chargeback activity
- Card-present versus keyed or online volume
Group the fees by purpose
Statements use different labels, so group charges into functional categories. This makes competing proposals easier to compare even when providers format pricing differently.
- Interchange and card-network assessments
- Processor markup or discount-rate charges
- Per-transaction and authorization fees
- Monthly, statement, PCI, gateway, batch, and support fees
- Equipment purchase, rental, lease, replacement, and connectivity costs
- Chargeback, retrieval, early-termination, and other exception fees
Look for operational causes, not just pricing
A high cost can come from the way payments are accepted. Keyed transactions, outdated equipment, duplicate gateways, multiple low-volume merchant accounts, and inconsistent batching may contribute to avoidable expense or reconciliation work.
Ask whether the current setup supports the practice's actual workflow: in-office checkout, deposits, patient payment plans, invoices, portal payments, card-on-file, refunds, and multiple locations.
Compare proposals on the same assumptions
Require any provider comparison to use the same sales volume, transaction count, card mix, payment channels, hardware needs, and contract term. Record what is included, what is estimated, and what can change.
A useful review ends with a written current-state summary and a proposed-state summary. It should identify expected changes, implementation requirements, contract obligations, and the measurements the practice will use after launch.