Thinking about surcharging in your practice? Here’s what to consider

One of the biggest trends in payments has been surcharging customers for the cost of processing payments. While the practice of surcharging has been less common in healthcare, there has been a shift recently as healthcare businesses seek to recover increasing operational costs. 

In fact, according to Tyro Health data, 25% of all transactions made by healthcare businesses now include a surcharge. Over the last 12 months, the percentage of transactions with a surcharge has doubled.   

In this article, we explain surcharging to help you decide if it’s a practice that is right for your business.  

What is surcharging and what are the rules? 

A surcharge is a fee that a business owner can charge customers or patients, to offset the costs of accepting payments. 

The most important requirement is that the amount you surcharge cannot exceed the cost you incur from your payments provider, and you need to review this at least every 12 months. This is known as your ‘cost of acceptance’.  

What is my cost of acceptance? 

Knowing what your cost of acceptance is can be tricky. The fee you are charged to process the payment depends on a range of factors, though the two most common are: 

1. the type of payment facility you have signed up to, and   

2. the type of card your patient chooses to use. 

For example, you might have a payment facility that charges you differently depending on the card that is presented. So, if your patient uses an international credit card, then the price that is charged to you for that card will be higher than if they used an eftpos debit card. 

Alternatively, you might have a single rate that you pay regardless of the type of card that is used. In this case, it doesn’t matter what kind of card is presented, your cost of acceptance will always be the one flat rate. 

The easiest way to work out your cost of acceptance is to ask your payments provider. Tyro customers can sign into the Tyro Portal and select the Costs tab to run a report on the cost of acceptance. This will provide you with the exact number for you to consider when setting your surcharging rates.

How do I set up surcharging? 

If you’re a Tyro customer and want to set up your Tyro surcharge preferences, simply log into the Tyro Portal and head to Self-service > Surcharging. You can use the information provided above regarding what your cost of acceptance is to set an appropriate rate. 

For detailed instructions please see here. We also have signage templates which can be used to inform customers of surcharges, including specific rates.  

How do I set up surcharging for multiple merchants on one EFTPOS device? 

Each merchant that is set up in a multiple merchant facility is their own account, with separate invoices, authorisations and even unique cost of acceptance. This means that if you are looking to set up surcharging for multiple merchants, this will need to be done individually for each merchant. Importantly, the surcharge for that merchant cannot exceed the cost of acceptance for that specific merchant.  

Can I offer a “surcharge free” option? 

Absolutely, and we recommend this. 

A great Tyro feature is that you can set different rates for different cards. This means that if you’d like to set a different rate for credit cards versus eftpos debit cards, you can.  

Additionally, many pricing options that we offer at Tyro include a separate rate for credit transactions versus eftpos transactions, with the eftpos rate often being lower. 

With the cost of processing an eftpos card being lower, many practices choose to surcharge patients who use a credit card, but not surcharge customers who use an eftpos card.  

Taking a thoughtful approach to how you apply a surcharge and ensuring that you offer a surcharge-free option, can help you cover most of the costs of accepting payments whilst also supporting patients who may be struggling with affordability.  

How do I receive the surcharging fee? 

By default, Tyro will settle to you your funds minus the surcharge amounts and deduct the surcharge amounts from your Tyro invoice at the end of the month. This means that you can enable surcharging without concern for reconciliation between Tyro, Tyro Health Online, or any other integration PMS you might use. 

You may choose to have the surcharge amount included as part of your daily settlement, but this is not recommended as transactions processed and funds settled will not reconcile. 

The end of day Tyro EFTPOS machine reconciliation reports will also show the amount you have surcharged separately to the total of your takings, which will further enable you to reconcile. 

Can I apply a surcharge on Tyro Health Online? 

With Tyro Health Online Payments, Dynamic Surcharging¹ is not available, however, merchants using Tyro Health Online are able to add an additional line item to their invoice for a patient, which includes an amount equivalent to the cost of acceptance and a description of this charge as a surcharge. This is possible because the fee we charge for Tyro Health Online is fixed – that is, there is only ever one price for all transactions, regardless of the type of card the patient uses. 

I’m ready to surcharge – what next? 

If you’re ready to enable surcharging, head to the Tyro Portal and get started in two simple steps:  

1. Check your cost of acceptance in the portal, and 

2. Enable surcharging at an appropriate rate 

If you need more information, including if you are considering changing the fee schedule structure you are on, feel free to contact us, and we’d be happy to help. 

Disclaimers

¹ Dynamic Surcharging is only available on CounterTop and Mobile EFTPOS machines and excludes eCommerce transactions.