What Every Telehealth Entrepreneur Needs to Know About Payment Processing

Want to start accepting payments for virtual care services with zero headaches?

With the Telehealth market predicted to exceed $186 Billion in Revenue by 2025 and growing faster than ever, now is the perfect time for entrepreneurs to launch their own virtual healthcare business.

Here’s the problem…

Most entrepreneurs spend their time developing their telehealth platforms. Hiring providers, building apps and focusing on the clinical side of care.

Then they try to accept payments and hope for the best.

It doesn’t work like that.

Accepting payments for telehealth services is completely different than traditional ecommerce. It’s more complex. Heavily regulated. And if it’s not done correctly — your business could be shut down overnight.

What you’ll learn:

• Why Telehealth Payment Processing Is So Complicated
• How Virtual Care Payment Gateways Work
• How To Choose A Payment Partner
• The Most Common Payment Mistakes To Avoid

Why Telehealth Payment Processing is So Complicated

Telemedicine businesses are considered “high-risk” by most payment processors.

This is completely understandable from the processor’s point of view. Telehealth businesses utilize card-not-present transactions, recurring billing, are heavily scrutinized by government regulations, and tend to have higher than average chargeback ratios.

The problem is that banks don’t like high-risk businesses.

When a telehealth business applies for a merchant account from their local bank or with brands like Stripe and PayPal, they usually get rejected.

This leaves most telehealth founders frustrated and wondering what’s going on.

The answer is simple. In order to properly accept payments for telehealth services, businesses need to work with a specialised telemedicine merchant account through a Virtual Care Payment Gateway.

If you try to accept payments without one, your funds will get frozen. Accounts will get terminated. Transactions will be declined.

How Virtual Care Payment Gateways Work

Telehealth payment gateways are the glue between healthcare providers and payment processors.

They facilitate the secure transfer of payment information from patient to provider. Ensuring funds are delivered quickly and healthcare compliance standards are maintained.

But gateways provide so much more functionality.

Here’s what a Virtual Care Payment Gateway will do for your telehealth business.

• Process payments in a way that’s compliant with HIPAA
• Provide Recurring Billing & Subscription Management
• Accept payments from any state (and eventually country)
• Collect insurance copays and patient out-of-pocket expenses
• Enable powerful fraud screening tools

Basically, every aspect of the payment process goes through the gateway.

A telehealth business’ integration with their payment processor flows through the virtual care gateway.

Payments are verified by the gateway. Information is encrypted. Then forwarded to the processor for final approval.

Without a HIPAA compliant payment gateway, patient data can be compromised. Banks will have access to sensitive financial information. Which violates Federal regulations.

Your business could be fined (and potentially lose the ability to process payments).

How To Choose A Payment Partner

Not all payment gateways are created equal. Especially when it comes to telehealth.

Here’s what every entrepreneur in virtual care needs to consider when evaluating payment processors.

Learn Everything About High Risk Processing

You can’t use a generic payment processor like Stripe, PayPal or even most local banks.

Every single one of these providers will either outright deny your telehealth business from opening an account — or close your account down at a later date.

When running a telehealth business, you’re going to have to understand high-risk accounts.

That’s because:

According to recent data from the AMA, over 71% of Physicians utilized telemedicine weekly as of 2024.

Virtual care is mainstream. But payment processing isn’t quite there yet. And bankers and payment professionals are still struggling to adapt to this new normal.

That’s why it’s critical to partner with a company that specialises in high-risk healthcare payments.

Focus On Compliance First

Payments aren’t simply about exchanging money for services.

Running a healthcare business (virtual or brick-and-mortar) requires you to protect sensitive patient information while doing it.

Any payment gateway serving telehealth businesses must have:

• PCI DSS Level 1 Compliance
• HIPAA Compliance
• Tokenisation

Period. End of list.

You don’t want to be digging your way out of massive compliance failures. Take the steps to ensure your payment provider can keep up with regulations.

Implement Chargeback Prevention Measures

Chargebacks are one of the biggest threats to telehealth businesses.

When a patient contacts their bank to dispute a payment instead of their healthcare provider, it’s called a chargeback. Chargebacks happen all the time in healthcare.

Patients don’t recognise the description on their credit card statement. They don’t feel like the virtual visit was “worth it”. There are endless reasons why patients can (and will) file chargebacks.

Chargebacks are expensive.

Too many chargebacks and your payment processor will shut you down. So it’s important to take preventative measures wherever possible.

Things like:

• Using a branded billing descriptor
• Setting up automated alerts for chargebacks
• Dispute resolution services
• Fraud screening technology

These features can drastically reduce your chargeback ratio. Chargeback ratios are a big metric that payment processors use to determine how risky your business is.

Recurring Payments are Everything

Depending on the business model, many telehealth businesses operate on some form of subscription.

Patients love the convenience of joining “virtual health clubs”. Routine care for chronic conditions. Monthly therapy sessions.

You name it.

The payment gateway and processor you choose need to be set up to handle recurring payments.

Transactions fail for all kinds of reasons.

Lucky for you, there are payment gateways that focus on making sure you get paid. Even if the first payment method fails.

These vendors provide tools like automatic retry schedules and intelligent “dunning” management. This allows you to collect on payments that would otherwise be lost.

The Most Common Payment Mistakes To Avoid

It’s easy to make the same mistakes as other telehealth entrepreneurs when getting started. Too many founders have trusted the wrong payment partners and wished they spent more time focusing on payments before launching.

Here are the things to avoid when starting your telehealth business.

• Using a regular merchant account. Just doesn’t work with telehealth.
• Skipping over HIPAA compliance. Seriously. Don’t do this.
• Not having solid chargeback prevention tools in place.
• Using a payment gateway that doesn’t allow for recurring billing.
• Underestimating state regulations. Some states have payment parity laws that affect how telehealth is reimbursed.
• Not having a plan for scaling your payment volume.

Ok, so that’s seven. But they’re all important.

Wrapping Things Up

If there’s one thing to focus on before diving headfirst into launching a telehealth startup — it’s payments.

The ability to collect revenue from patients will make or break the business. You don’t want to spend all of this time building your brand, only to be shut down by your payment processor because of high chargebacks.

Remember:

• Payment processors avoid high-risk businesses (like telehealth).
• Without the right specialised merchant account, your funds could be frozen.
• Chargebacks are extremely common with telehealth.
• Look for a gateway that allows you to focus on growing your business. Not chasing payments.

Got payments under control… and everything else falls into place.