Should I Pass Credit Card Processing Fees to my Clients?

One of the most important things about running a private practice is making sure that you have a way to get paid for the services you provide. In 2018, there is no shortage of options available. If you’re just starting your practice, when you go to your bank to set up your accounts, they’ll probably be the first to offer you payment solutions. But there are a ton of others. It seems like Square tends to be the most popular (it’s the solution that we use at Yetman Counseling Services), but there are solutions from Paypal, Intuit, and a whole host of others.

But today’s question is not about which of these providers is best for your practice. It’s about the idea that, if you want to accept credit cards, it’s going to cost you! What do you do with that cost? Do you accept it as the cost of doing business? Or, do you pass that cost along to your clients in the form of a surcharge or a convenience fee?

A Brief Intro to Transaction Fees

Let’s start out by talking a little about what to expect. I’ll be using Square’s service in our examples since it’s so popular but just know that each provider is going to have a slightly different fee schedule.

Whenever a credit card transaction occurs, a lot of different entities are involved. There are merchant accounts and processors and settlements. For our purposes, the important things to know are that there are a lot of moving pieces and that managing all of those pieces cost money. Companies like Square handle all the hard work and ensure that you and your client have a smooth transaction without worrying about the details.

In return, Square takes a portion of your transaction to cover the cost of the transaction and to pay themselves for a job well done. Depending on whether or not the client has their card with them, the fees will be a little different. If the client hands you their card and you swipe it or use the chip, Square will take 2.75%. If you’re running a card on file or the client tells you their card number, the fees go up to 3.5% + $0.15. When a card isn’t present, there is a higher risk of fraud and all of the players in the process (including Square) charge higher fees. If you happen to send an email invoice to a client that they pay online, Square charges 2.9% + $0.30.

Real number time. Let’s say that you charge $100 for a session.

If your client hands you their card and you run it, it’s going to cost you $2.75. Square will deposit $97.25 into your bank account. If you run their card on file, it’s going to cost you more: $3.65 ($3.50 for the 3.5% and extra $0.15). In this case, you’ll get $96.35. If you happen to send an invoice to this client to pay later, the cost will be $3.20, meaning you’ll receive $96.80 from Square. Remember these numbers: we’ll come back to them later.

Legal & Ethical Considerations

It’s easy to get frustrated with this extra cost. If a client pays you cash, for example, you get the full $100. You don’t have to pay anyone anything! Same thing with a check. So, it can be really tempting to want to recoup the cost of the credit card fees in order to ensure you get your full session rate.

Step one should always be to consider, “Is this legal?” Consult with your legal counsel on this to be sure, but it does seem that, in most states, merchants have the right to pass fees like this along if they choose. But, if you live in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Maine, or Texas, know that it is against the law to charge these fees to your customers.

But it’s not just “Is it legal?” You should also be asking, “What exactly is legal?” According to, “merchants can pass along fees in the form of a surcharge equal to what they pay to accept the card, up to 4 percent.” In other words, you should check with your local laws to find out what you can actually charge. Based on the information here, you aren’t allowed to charge a flat fee (unless the flat fee is actually LESS than the processing fee). Instead, you can only pass on the exact amount of the fee to the client.

Remember the different fee structures we mentioned a minute ago? You will have to know which of these rates you’re being charged so you’ll know what to pass along to your clients. You can see it can get confusing, real fast.

It is also very important to remember that it is only legal to charge surcharges on credit cards. If you have a client that pays with a Health Savings Account card (even if it has the Visa or Mastercard logo) or even a debit card that you’re running as a credit card, it is not legal for you to add a processing fee.

While it’s not entirely a legal question, in order to be in compliance with your terms of service, you actually have to let Visa and MasterCard know that you’re going to be charging service fees. They have web forms set up so you can share that information. You can find Visa’s and Mastercard’s online at their websites.

A second consideration would be to look at our respective codes of ethics. has a great discussion (albeit a few years old) about the ethics of this practice. The summary though is that fees like these should be directly spelled out for clients during the intake process. They need to know up front what they are paying for and that includes knowing that they are paying for the convenience of using their credit card.

Should I Pass Along My Fees?

With those two very important topics out of the way, the only question that remains is whether or not it’s a good business idea. There are many different opinions there are about whether therapists should pass their fees onto their clients. On the flip side, there’s really only two opinions from the client. They either accept them as a reality or the absolutely hate them. What is it going to mean for your client’s satisfaction if they have to pay a fairly trivial fee in addition to your session rate? How do you feel when you buy a ticket from TicketMaster or open your phone bill? Most of us feel there are far too many fees, nickel and diming us all the time.

And think about what you get in exchange. If you accept cash, unless you’re going to keep it under your mattress, you’re going to have to make regular trips to the bank. Now that our mobile banking apps allow us to scan checks with our camera to make deposits, they’re a little more convenient, but we still have to wait for those checks to clear and there’s always the risk of checks bouncing. With services like Square, you get the benefit of having to make fewer trips to the bank, you get the peace of mind that your money will be deposited (typically) within one business day, and you have a very low occurrence of chargebacks. You also get the opportunity to keep your client’s cards on file in a secure way and the convenience of charging them as needed. It can even eliminate the awkwardness that some of us feel transitioning from an emotional session to the transactional stuff that has to happen for us to get paid.

Honestly, it just feels, to me, like a bad idea to pass these fees along to our clients. But I understand, too, that this isn’t cut and dried for a lot of people. It’s not a trivial amount of money to say that somewhere around $30 is going to be taken out of every $1,000 we make. But there are a couple last things to keep in mind.

First, these fees are typically tax-deductible so ensure that you’re speaking with your tax professional or accountant to find out exactly what this means for your financial situation.

Secondly, there is always the opportunity to structure your professional rates to account for this cost. When you set your rates, you probably accounted for things like the rental or mortgage cost of your practice, the cost of your insurance premiums, the cost of living in your area, and a host of other factors. It’s OK to factor these processing fees into the rate your charging your clients as well.

Lastly, be open to feedback from your clients. Invite it, even. Listen to what they’re telling you about their experience. Even though your session may be scheduled for a fixed amount of time, their experience of you lasts well after they leave a session. What does it do to the quality of your relationship with them if you pass along your fees or if you don’t?