Why We Need Credit Card Payments for Long-Term Care

Why We Need Credit Card Payments for Long-Term Care

Author: Adam Langdon, Managing Director, Enterprise Banking

Today, over 1 million adults aged 65 or older reside in nursing homes. Many others live in senior living communities and assisted-living facilities. While making the decision to place a loved one in long-term care is never easy, challenges can quickly extend beyond the expected emotional and logistical factors. With as much as 40% of all long-term care paid for by individuals or families, how payments will be made and financed is another consideration.

Currently, more than half of surveyed Americans prefer to make payments by credit card, and half feel that card payments make financial record keeping easier to maintain.

Despite this growing trend, the majority of long-term care facilities continue to require payment by check. This approach places a strain on the family at a time when they are navigating the complexities of elder care, and can weaken the financial position of the facility, particularly the 50% of entities already facing financial hardship. That’s why it’s time to implement credit card payments for long-term care facilities.

Understanding the Payment Risks in Long-Term Care

The over reliance on outdated payments methods, such as checks, puts long-term care facilities in jeopardy across many fronts. The first is mail fraud.

A FinCEN Alert released in 2023 indicated a notable rise in mail theft-related check fraud. When checks are stolen from postal workers or mailboxes, payment never reaches the intended recipient, resulting in delays and added staff hours as the facility sorts through the issue.

Fraud is not the only reason a check payment may be late. If residents fall ill or are moved to a hospital setting for a month or two, they may be physically unable to pay the facility. As a result, payment is delayed until the individual can resume managing their finances. Given the slim margins facing long-term care entities, late payments can be a source of significant financial burden.

Historically, long-term care facilities have shied away from card payments. One reason is transaction size. In our experience, the average facility transaction ranges from $3,000 to $12,000 monthly, well above the typical charge accepted by most credit card issuers. Other facilities worry about the impact of processing fees on the bottom line.

However, by accepting cards, facilities can overcome many financial challenges facing the industry. For example, credit card payments can be automated, providing the framework for recurring monthly charges. Automated, recurring transactions provide predictable cash flow and reduce the staff time associated with tracking down late payments.  

With card payments, care facilities are also able to meet family preferences and better support patients through challenging times.

Making the Benefits of Card Payments Available in Long-Term Care

Understanding the family preferences of patients in long-term care, as well as the financial advantages that can be made available to facilities, FNBO has partnered with VISA to deliver a card solution that benefits both parties.

By signing up for merchant services through FNBO, facilities can bypass typical card transaction minimums and process larger monthly care bills by card. Facilities also become eligible for reduced interchange rates on non-regulated debit card transactions, as well as a rules rate change that allows for collecting a percentage-based convenience fee from patients who wish to pay by card. By eliminating or reducing the impact of transaction processing fees, facilities can meet the needs of more families and establish recurring card payments for the benefit of the institution as well as patients.

Set up is fast and easy, requiring facilities to first join FNBO’s special incentive program with Visa to initiate the benefits. From there, FNBO merchant specialists will set facilities up with simplified access to credit card processing through an online portal. There is no need for a physical card reader, and facilities can easily set up automated recurring payments or process one-off transactions as families see fit.

Offering credit card payments allows long-term care facilities to align with family preferences for convenience and digital transactions, while ensuring timely and predictable cash flow critical for operational stability. In essence, integrating credit card payments is a strategic move that fosters financial health for facilities and eases the care journey for families.

About the Author

As the leader of Merchant Services, Adam emphasizes revenue development and growth for area companies, helping to drive business profitability in support of thriving and prosperous communities. He has garnered experience across multiple industries, working with a number of top financial firms to lead merchant service strategies.