Discover the truth behind your credit card processing fees...

Discover the truth behind your credit card processing fees with an effective rate calculator

Key takeaways

Knowing your effective rate (all combined fees over total monthly sales) is critical for managing your credit card processing costs.
Factors, such as the payment processor you use, your transaction volume and accepted payment methods, can influence your payment processing costs.
Keeping an eye on your rate helps avoid hidden costs, negotiate better terms and ensure you’re getting the most value from your payment processing solution.
Tools like an effective rate calculator make it easier to understand and monitor your processing costs, leading to significant savings.

As a chiropractor, you probably didn’t envision an effective rate calculator as something you’d regularly use in your practice. Out of your many tools—from spinal adjustment tables to muscle stimulators—it’s safe to say a calculator probably wasn’t high on your list. Still, understanding your true payment processing costs is crucial to the financial health and sustainability of your practice.

Between caring for patients and managing your finances, the last thing you should deal with is hidden fees and inflated rates from your payment processing solution. But it happens all the time; many practitioners, just like you, struggle with confusing pricing structures and perplexing monthly statements. This can make managing your finances—and your practice—an overwhelming task.

However, there’s a practical solution to help you eliminate confusion and simplify payment processing.

It’s all about your effective rate.

If you’re exploring new payment processing options, or you simply want different ways to cut costs, here’s how calculating your effective rate can transform the financial health of your practice.

How to calculate your effective rate

First, what exactly is an effective rate?

An effective rate is the percentage representing all combined fees over the total sales within the same month.

This metric shows you what you really pay for every single credit card transaction—without getting lost in the details of your statement.

It also helps you fairly compare fees between payment processors, allowing you to choose the most cost-effective solution for your practice.

To calculate your rate, you just need to follow the following formula:

Effective Rate = (Processing Fees / Total Sales) * 100

For example, if your practice had $10,000 in total sales for a month and paid $350 in processing fees, your calculation would look like:

Effective Rate = ($350 / $10,000) * 100 = 3.5%

This means your effective rate for that month stands at 3.5%.

What’s a good effective rate?

Typically, 2.5% to 3.5% maximum is considered a good effective rate for a small- to medium-sized chiropractic office. Face-to-face transactions tend to have lower rates, while online transactions can reach up to 3.5% due to the increased risk of fraud in card-not-present situations.

Keep in mind, your rate isn’t static—it can change based on several aspects. The payment processor you use, the volume of transactions you handle and the various payment methods you accept all play a role in determining your final cost.

So, what exactly could cause your rate to go up? It doesn’t just happen out of the blue. For one, rates can increase 1.5% for businesses deemed high-risk due to factors like poor credit, low monthly processing volume or a spotty processing history.

What’s more, a higher rate could be symptomatic of hidden costs and deceptive practices:

Complex pricing models can obscure the true cost of processing and pile on a host of hidden fees.
Hidden contract fees, slipped in by processors, can inflate your overall processing costs.
Credit card networks can charge inflated interchange rates, which can be hiked up by some processors.
Some chiropractors are misled to believe they’re paying a low rate of around 2.1% when their rate is actually closer to 3.5%.

Being alert in these areas is essential. Doing so allows you to renegotiate pricing or switch processors if necessary. That way, you can ensure your credit card processing costs stay reasonable and your practice stays financially healthy.

Why does it matter?

As a chiropractor, managing your expenses can be a tricky task. Among these, your payment processing fee can have a considerable impact. It’s easy to find yourself on a multi-tiered service plan, seemingly cost-effective, but riddled with hidden fees.

Think about it: If the average chiropractic practice bills more than $600,000 and collects around $450,000 annually, a seemingly small 1% hike in fees due to hidden charges can quickly add up to thousands.

That’s why it’s critical to keep an eye on your effective rate. Those potential savings can have a considerable influence on your practice—from revamping your marketing strategy, enriching your clinic’s services, to improving your personal lifestyle.

Keeping track of your rate also unlocks several key benefits, including:

It gives you a clear picture of your payment processing costs, ensuring you’re not paying more than you should.
It allows you to compare your costs with industry standards or competitor rates, helping you determine whether you’re getting a fair deal.
Monitoring trends in your payment processing costs can highlight potential problems or opportunities for saving, guiding your negotiations with payment processors or even prompting a switch to a more cost-effective provider.
A data-driven approach empowers you to make informed decisions about your payment processing solutions, helping you achieve the best value for your money.

Overall, understanding and controlling your rate equips you with the necessary tools to significantly reduce your processing costs.

Start improving your chiropractic practice’s financial health with ChiroSpring

Maintaining your business’s finances and finding the right payment processing solution can be complex and confusing to navigate. Yet, understanding your credit card processing costs can help you make the most informed decision and find the best provider for your practice.

But managing your finances in your busy practice can be time-consuming and difficult. When you have patients to care for, sifting through the fine print to find hidden fees and obscure contract terms can feel like a chore.

However, ChiroSpring offers an effective rate calculator to help remove the manual, hours-long analysis of your statements. It allows you to streamline the process and gain deeper insight into your monthly payments. With this tool, you can:

Swiftly identify any hidden fees from other payment processors
Do a side-by-side comparison to see what you’d be paying with ChiroSpring Pay

Plus, ChiroSpring Pay offers flat-rate pricing, eliminating any surprise monthly or hidden fees. This means, if you currently shell out hundreds in fees each month, it could help you save thousands annually.

Doing what you love—caring for your patients and identifying the best treatments for them—is essential. However, maintaining the financial health of your chiropractic practice is just as important. With ChiroSpring’s effective rate calculator and its clear-cut payment solution, you can balance your practice’s financial well-being and patient care with ease.