Surcharging Is Going Mainstream. How Senior Living Should Think About It.

Go out to dinner in most US cities right now and there's a decent chance you'll see a line item on the check labeled "card fee," "service fee," or sometimes just "3%." Buy something online from a government agency, pay a utility bill, settle up with a contractor, and you'll see the same pattern. The fee that nobody wanted to talk about five years ago has quietly become background noise.

Healthcare is just now catching up to the rest of the economy. The J.D. Power 2026 U.S. Merchant Services Satisfaction Study, surveying roughly 4,400 small businesses, found 35% of US small businesses now add a surcharge to credit card transactions, up from 34% the year before. CMSPI's State of the Industry Report pegged independent and small US merchant adoption at 31% as of 2022, and the trajectory has been steadily upward across professional services, restaurants, and government billing for several years. Healthcare's adoption curve is real and accelerating, even if comprehensive industry-wide data hasn't fully caught up yet.

The obvious question for senior living communities, PT clinics, and behavioral health practices is whether they should follow suit. The less obvious (and more useful) answer is that most of them shouldn't be thinking about this as "surcharging" at all. They should be thinking about convenience fees, which is a legally and operationally different thing.

Surcharges and Convenience Fees Are Not the Same Thing

The terms get used interchangeably, but they carry different legal and regulatory weight.

A surcharge is an additional fee applied specifically when a consumer pays by credit card, regardless of channel. It's intended to offset the merchant's processing cost. As of 2026, surcharging is banned entirely in Connecticut, Massachusetts, Maine, and California. Colorado caps surcharges at 2%. States like New York, Oklahoma, and Texas have restrictions that make standard percentage surcharges legally complicated. Debit cards can never be surcharged under federal law, in any state, period.

A convenience fee, on the other hand, is charged when a consumer uses a specific alternative payment channel that the provider offers for convenience, such as paying online, by text, or over the phone instead of in person. A convenience fee should only be offered if guarantors can pay by other means such as debit card or eCheck.  These distinctions gives convenience fees broader legal standing and makes them a more natural fit for healthcare settings where the primary value proposition is letting residents and patients pay digitally from anywhere, on their own schedule.

For senior living operators accepting payments from families across multiple states, this distinction is especially important. A community in Florida might have a resident's adult children paying from Massachusetts, Connecticut, and California. A convenience fee model navigates that complexity in a way that a surcharge model does not.

Why This Is Happening Now

Three things are pushing fee pass-through into the mainstream in healthcare.

Credit card processing costs are climbing, and they've been climbing steadily. US merchants paid an estimated $93 billion in Visa and Mastercard credit card fees in 2022, roughly triple the $33 billion paid a decade earlier. For a senior living community processing $200,000 a month in credit card payments at a 3% average rate, that's $72,000 a year absorbed entirely by the operator.

Consumers are also used to it now in a way they weren't a few years ago. Research from ACI Worldwide found that insurers implementing surcharging programs reported zero customer attrition. Don Apgar, a payments analyst at Javelin Strategy, made the point that in healthcare specifically, where people choose providers based on the care relationship rather than transaction costs, a small fee is unlikely to change anything about where they go.

Margins don't leave much room to keep absorbing processing costs, either. CCRC and Life Plan Community expense ratios hit 87%. Roughly half of skilled nursing facilities operated at negative margins in 2023. Behavioral health and PT clinics face ongoing reimbursement pressure from commercial and government payers. Eating $50,000 to $100,000 a year in card fees is a real drag on operations that already don't have much cushion.

What the Data Says About Willingness to Pay

The concern operators voice most often is that passing a fee will upset residents or patients and their families. The data suggests otherwise.

Research on long-term care bill payers found that 69% say they are willing to accept a processing fee for the convenience of paying by credit card. When you consider that 75% of these same payers want the option to pay by credit card, and 67% say they would choose a facility that accepts cards over one that does not, the math becomes clear: offering card payments with a convenience fee is a stronger competitive position than not offering card payments at all.

The key is in the framing. Families paying a $6,000 monthly assisted living bill are not comparing that experience to buying groceries. They're comparing it to every other recurring bill in their life: mortgage, insurance, utilities. In most of those contexts, electronic payment options come with some form of fee attached, and people pay them willingly because the convenience is worth it.

How to Implement Without Creating Friction

If you're considering a convenience fee model, here's what matters in practice.

Be transparent from the start. Post the fee clearly on your payment portal, on statements, and in any onboarding materials for new residents and families. The biggest source of frustration isn't the fee itself. It's surprise. Families who know what to expect when they sign up rarely push back.

Offer alternatives. When a convenience fee applies to credit card payments specifically, make sure ACH, autopay, and other no-fee options are easy to set up and clearly communicated. Many operators find that convenience fees actually increase autopay enrollment because families see the incentive to set it up and avoid the fee entirely. That's a win for the operator, because autopay creates the predictable, recurring revenue that stabilizes cash flow.

Make it consistent across every channel. Whether a family member pays online, by text, or over the phone, the fee structure should be the same. Payment industry experts emphasize that inconsistency across channels creates confusion and complaints. If you charge online but not over the phone, you'll hear about it.

Check your state. If you operate in Connecticut, Massachusetts, Maine, or California, work with your payment partner and legal counsel to understand how convenience fee structures (as opposed to surcharges) apply in your jurisdiction. The legal treatment differs, and getting it right upfront avoids problems later.

Use a payment platform that handles compliance automatically. The right technology partner will manage the distinction between credit and debit cards (since debit cards cannot be surcharged under federal law), apply the correct fee structure based on payment method, and generate the appropriate disclosures on statements and receipts. This is not something to manage manually.

The Bigger Picture: Convenience Fees Make Digital Payments Sustainable

Here's the thing we've noticed working with communities and practices on this: the real value of a convenience fee model isn't the fee revenue itself. It's that it removes the primary financial objection to offering modern digital payment options in the first place.

A lot of operators have hesitated on card payments, text-to-pay, or online portals because they couldn't justify absorbing 2.5 to 3.5% on every transaction. That hesitation means their residents and families are still mailing paper checks and waiting for them to clear. The process adds days to cash flow, costs the operator $7 to $8 per transaction in manual handling, and creates a billing experience that feels dated compared to every other service those families pay for.

Convenience fees change the math. They make it financially viable to offer the kind of digital-first payment experience that 82% of consumers now prefer, without eating into already thin margins. When families can pay by card, enroll in autopay, or settle a balance from a text message, the operational impact compounds quickly. Paper handling drops away. Reconciliation cycles shorten. Billing teams reclaim hours they were spending on manual work that didn't generate revenue. Cost-to-collect can drop by as much as 90% once the paper-and-check workflow is genuinely behind you.

Surcharging is going mainstream across healthcare not because operators want to charge more. It's because this is how the economics of a modern payment experience actually work.