Payment practices for health care businesses need to be precise and intentional. Before choosing to accept any new types of payments, it is vital to thoroughly understand the advantages, disadvantages, and ramifications.
A case in point is whether you should allow your patients to pay using virtual credit cards (VCCs) and whether it makes sense to integrate them into your financial operations.
Virtual credit cards defined
A virtual credit card (VCC) is a digital payment tool that is connected to an already-existing credit card account.
Instead of using the primary number for online transactions, the VCC generates a unique, temporary string of digits that a customer can use to make online or other purchases.
Pros of VCCs
Reduced risk of fraud
Accepting payments made with a VCC at your practice provides several benefits. Since each transaction can come with its own single-use number, security is enhanced.
Limited exposure of the customer’s primary number also reduces the chances that they will become victims of identity theft. This minimizes the risk of fraud and eliminates the need to store sensitive payment information.
Simplified tracking of payments
From an administrative standpoint, VCCs can simplify back-office tasks. Payments often come with electronic remittance advice (ERA), which can be easily matched to specific claims, reducing manual reconciliation errors.
Improved relationships
Accepting VCCs also shows patients and payers that your medical office is equipped with modern, efficient billing systems. This can improve relationships with insurance carriers and reflect positively on your practice’s reputation.
In an era where healthcare providers are expected to operate with the same level of tech-savvy efficiency as other industries, adopting VCCs is a step toward a more streamlined, secure, and responsive billing process.
Cons of VCCs
Virtual credit cards also have their downsides. While they are gaining broader acceptance, some merchants still do not take them.
Higher interchange and processing fees
Virtual credit cards are typically processed as card-not-present transactions, which carry a higher level of perceived risk compared to standard in-person payments.
As a result, they’re subject to elevated interchange fees that can take a noticeable toll on your practice’s profit margins.
Increased administrative complexity
VCCs often require staff to manually enter card information into your virtual terminal, which can be time-consuming and prone to error.
If your office lacks automated tools to handle these transactions, managing a high volume of VCC payments can place a burden on your billing team.
Lack of recurring payment options
Since VCCs expire after every use, this payment method is not suited to recurring or subscription payments.
Because medical costs can often be prohibitive and are frequently broken down into more manageable chunks, this could be a deal-breaker for your healthcare company. Virtual credit cards have the potential to add an extra layer of security, control, and efficiency to the payment practices at your medical practice. However, only you can be an accurate judge of whether VCCs will integrate with the needs, systems, user comfort levels, and patient preferences.
