Overview
The Service Fee (Surcharge) Program allows your office to pass credit card processing costs to patients only when a credit card is used.
This program is designed to:
- Encourage patients to use lower-cost payment methods (debit or HSA)
- Eliminate or reduce merchant fees for your office
- Keep your pricing transparent and compliant
Important Service fees are never applied to debit or HSA cards.
How Service Fees Work
When a payment is processed through PayStack:
- The system automatically determines the card type:
- Credit card → Service fee applies
- Debit / HSA card → No service fee
- This determination is made in real time using the card’s underlying data
- Staff do not need to manually select card type
💡 You won’t always know if a card is credit or debit just by looking at it — the system handles this automatically.
Why This Matters
The surcharge program helps balance cost responsibility:
Payment Type | Patient Pays Fee? | Office Cost |
Credit Card | Yes | Minimal / None |
Debit Card | No | Lower Processing Cost |
HSA Card | No | Lower Processing Cost |
This encourages patients to choose lower-cost options, which benefits both:
- The patient (avoids fees)
- The practice (reduced expenses)
How It Works in Different Payment Scenarios
1) In-Office (Terminal Payments)
- Patients are informed before inserting or tapping their card
- The terminal processes the payment and applies the fee only if applicable
Need signage?
Contact your ISO partner for compliant signage specific to your program.
2) Over-the-Phone Payments (Card Not Present)
When processing a payment over the phone:
- After clicking Pay, a confirmation window (modal) appears
- This window shows:
- Base amount
- Service fee (if applicable)
- Total amount
This is a key moment for staff to:
- Inform the patient: “There is a small fee for credit cards, but no fee if you’d prefer to use a debit card.”
- Give the patient the option to:
- Proceed with credit (with fee)
- Switch to debit (no fee)
This step improves transparency and reduces disputes.
Important Note About Recurring Payments
Service fees are not displayed during recurring setup.
Why?
- The system does not know if the card is credit or debit until the transaction runs
Instead, the authorization form includes this disclosure:
- “A surcharge fee will only be assessed on credit card transactions processed through this service.”
Reporting & Accounting
Understanding how service fees appear in reports is critical for reconciliation.
1) Two Types of Totals
Your reports will show:
- Practice Management Total (PM Total) → Payment amount (what goes toward the patient balance)
- Deposit Total → Payment + Service Fee (what hits your bank before processor fees)
2) Where Service Fees Go
Service fees are:
- Collected from the patient
- Not sent to your Practice Management system
- Included in your deposit totals
3) How to Record in Accounting
When recording deposits, split the deposit into:
- Production / Revenue → PM Total
- Merchant Fees Offset → Service Fee Total
4) Monthly Discount (Most Common Setup)
If your account uses Monthly Discounting:
- Your processor withdraws total fees once per month
During the month:
- You collect service fees from patients
At the end of the month:
- Collected service fees offset your processor bill
💡 Think of this as building a credit balance during the month that helps pay your final merchant statement.
Common Questions
Why don’t I see service fees in my Practice Management system?
Because service fees are not part of the patient payment amount — they are handled separately for accounting and compliance.
Why does a fee sometimes not apply?
The card used was:
- Debit
- HSA
These are excluded from surcharge programs.
Can staff override whether a fee is applied?
No. The system determines eligibility automatically based on the card type.
What if a patient disputes the fee?
Best practices:
- Ensure signage is visible
- Clearly communicate during phone payments
- Use the confirmation modal as your disclosure moment
✅ Best Practices for Your Office
- Keep clear signage at all payment terminals
- Train staff to communicate fees during phone payments
- Understand how to reconcile deposits vs PM totals
- Use reports to track service fee totals monthly
Summary
The Service Fee Program is designed to:
- Reduce your processing costs
- Encourage lower-cost payment methods
- Maintain compliance and transparency
When used correctly, it becomes a financial advantage for your practice while still giving patients flexible payment options.
Need help understanding totals or deposits? See link.
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