Payment processing and patient financing for a new practice

A new practice takes money three ways: insurance, patients paying at the desk, and patients paying over time. This page covers the last two.

It’s general education, not legal advice. Surcharging and lending rules vary by state, so check your setup with your attorney or CPA.

How card fees work

Every card payment carries fees. Visa describes interchange as fees passed between your bank (the acquirer) and the patient’s card issuer. You don’t pay interchange directly. You pay your processor a “merchant discount,” usually a percentage of each payment, which covers interchange plus the processor’s own charges.

Processors price that in two main ways:

• Flat rate. One price for every card. Square, for example, lists 2.6% + 15¢ for in-person payments on its free plan, as of Sept. 26, 2026. Keyed-in and card-on-file payments cost 3.5% + 15¢. Easy to read, easy to budget.
• Pass-through pricing, often called interchange-plus. You pay the actual network cost for each card, plus a set markup. Statements are harder to read. At higher volume, it can cost less than a flat rate.

Square also says businesses processing over $250,000 a year can ask about custom pricing. A practice can pass that in its first year.

The math

Example: a practice collects $1 million a year, with $600,000 paid by card at an average of $250 a payment. That’s 2,400 payments.

At 2.6% + 15¢, fees run about $15,600 + $360, or about $16,000 a year. Every quarter point of rate is about $1,500 a year. Keying in card numbers instead of tapping or dipping (3.5% + 15¢) would push the total to about $21,400.

Run your own numbers from your first three months of statements. Then get two quotes.

What to check in a processor

1. Practice software integration. Does it post payments straight into your practice management software, or does the front desk re-enter them? Ask your software vendor which processors it supports.
2. Card on file and payment plans. Can you store a card safely and run scheduled payments?
3. Text-to-pay and online payments for balances after insurance pays.
4. Contract terms: length, early termination fees, equipment leases, monthly minimums.
5. Deposit timing: how fast money reaches your account.

Square is one flat-rate option many small offices start with: see Square’s pricing. Compare it with at least one quote from a processor your practice software supports.

PCI basics

The card networks require every business that accepts cards to protect card data. The standard is PCI DSS. It applies to all merchants “regardless of their size,” says the PCI Security Standards Council. Whether you have to formally validate compliance is set by the card brands, so ask your processor.

For a small office, the practical steps are simple. Never write card numbers on paper or in chart notes. Use terminals and card-on-file tools that keep card data out of your own systems. Ask your processor which self-assessment questionnaire (SAQ) applies to you.

Surcharging: network rules and state laws

A surcharge is an added fee for paying by credit card. Visa’s rules for U.S. merchants, per its Feb. 2024 Q&A:

• Credit cards only. You can’t surcharge debit or prepaid cards, even when the patient picks “credit” on the terminal.
• Capped at your cost to accept that card or 3%, whichever is lower.
• Notify your acquirer at least 30 days before you start.
• Disclose it at the point of entry, at the point of sale, and as a separate line on every receipt.

State law comes first. As of Feb. 15, 2024, Visa understood that Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit surcharging. Colorado, Minnesota, New Jersey and New York have their own requirements. Visa says its list may contain errors, so confirm your state’s current law.

These rules may change. A proposed Visa and Mastercard settlement with merchants, preliminarily approved by a federal judge on June 9, 2026, would give merchants more room to surcharge. It isn’t final. Check with your processor before you set a surcharge.

Other card networks have their own rules. Also read your payer agreements for any limits on fees charged to patients.

In-house payment plans vs third-party financing

In-house plans keep the patient relationship with you. You set the terms, but you carry the risk if the patient stops paying, and your front desk does the collecting. Keep them short and interest-free. If you charge interest or late fees, lending laws may apply, so ask your attorney first.

Third-party financing pays you up front and shifts collection to the lender. Here’s what three common options say on their own sites, as of Sept. 26, 2026:

	CareCredit	Sunbit	Cherry
Product	Health care credit card	Installment plans, made by TAB Bank	Payment plans through a technology platform; Cherry says it’s “not a bank or a lender”
Promotions	Deferred-interest promotions, typically 6, 12, 18 or 24 months	“No-interest plans, now up to 24 months”	Interest-free Pay-in-4; qualifying 0% APR on longer plans
APR range	Not listed on the page we checked	0%–35.99%	0%–35.99%
Amounts and terms	Not listed on the page we checked	Not listed on the dental page	Up to $50,000; 1 to 60 months
Credit check	Not listed on the page we checked	“No hard credit check”	Soft credit check
Deferred interest?	Yes	Its fine print says to pay “within the promotional period” to avoid interest; ask how unpaid promo balances are charged	“Cherry does not use deferred interest”
Practice fee	Not listed on the page we checked	“As low as 1.9%” per transaction	Not published; says fees are lower than competitors
When you’re paid	Within two business days	At checkout	Within 2–3 business days

Sunbit also says it’s not available in Vermont, West Virginia or U.S. territories. Approval rates advertised by lenders (Sunbit says 87%; Cherry says “up to 90%”) are their own figures.

If you want an option without deferred interest, Cherry is one: see Cherry for practices. We don’t link Sunbit.

Deferred interest: the CFPB’s concerns

In May 2023, the CFPB reported on medical credit cards and financing plans. Its findings:

• Patients paid $1 billion in deferred interest on medical credit cards from 2018 to 2020.
• Interest rates often reached above 25%; the CFPB cited 26.99% for medical credit cards.
• These products were used for dental visits and treatment, among other care.
• Providers “may be unable to adequately explain complex terms, such as deferred interest plans.”

CareCredit’s own example shows how deferred interest works. A patient finances $2,000 on a 12-month promotion. Say $100 is still unpaid at the end. The patient is then charged all the interest built up since the purchase, $300 in its example. The interest was deferred, not waived.

What to tell patients

1. Say what happens if they miss the deadline. Use plain words: “If any balance is left after 12 months, you’ll owe interest back to today.”
2. Offer your own options first: a discount for paying at the visit, a short in-house plan, or phasing treatment.
3. Check insurance before financing so patients don’t finance a covered procedure.
4. Keep staff out of the sales role. Don’t pay bonuses tied to financing sign-ups.
5. Hand them the lender’s terms and let them apply on their own device.

What to do next

1. Pick a processor that works with your practice software. Start simple.
2. Decide on surcharging only after checking your state’s law and your payer contracts.
3. Write a financial policy that covers in-house plans and third-party financing.
4. Set up payroll and books before opening day. See payroll for a new dental practice and bookkeeping software for dental offices.
5. Plan your working capital while insurance payments ramp up. See dental practice loans explained.