Hidden fees

In recent years we’ve seen fees pop-up that appear to be Visa and MasterCard fees; however, a slight change in how a line item is labelled makes this fee all profit for the processor and agents, and the majority of doctors and practice managers will never find it. Just this past month I was contacted by a doctor who quoted me his pricing. When I first heard it I thought, ‘Wow, he has unbelievable pricing and I probably can’t help him.’ However, I still asked him to send over his statement just to be sure. After closely analysing his account I found a decimal point error (not really an error as this processor has made the ‘mistake’ on many accounts and at different costs) that would cost him more than $ 10000 per year. No one in his office would have ever been able to find this line item as an error because it appeared as a ‘normal’ fee that Visa or MasterCard would charge.

Another processor we analysed actually made a very simple error; however, once again, who would even know where to look. They labelled a cost of certain types of cards as X% and $Y cents per transaction. If you take the time to do the maths, the fee charged was higher than what it was supposed to be. Once again, the devil is in the detail.

Some may think ‘that is not the case with me, my friend set me up’. Your friend likely had all the best intentions; however, he or she may have been a sales agent for a processor. The issue here is that processors hide things from their reps so that they can keep more of the profit. In fact, there are so many different ways a processor can hide fees and make changes without sales reps realising it. So even though a friend set you up correctly, and with the ‘friend’ price, you may be paying much more than you should.

In one final example, we caught a processor triple charging when a doctor returned money on someone’s credit card. The initial sale was charged a fee, then a line item that said credit for this sale appeared as the processor refunding money. However, instead of giving a credit they charged the amount to the merchant, and then a third line item was created that allowed the processor to charge a ‘surcharge’ for the return (a completely made-up fee). In this case, the excess fees for processing a card from someone that never became a customer cost the doctor an extra $ 500.

This article could continue for pages and pages with examples of processors misleading merchants and taking money that is not deserved. The bottom line is that if you don’t have someone who knows the industry and the true costs keeping a close eye on your merchant account, you could be losing a great deal of money from your bottom line.