Health care may be fertile ground for payment facilitators
As health care payments increasingly look like traditional retail payments with various provider-consumer touchpoints, those acquiring hospital and medical clients are also turning to a payment facilitator model to secure contracts.
Like other businesses, many hospitals and health care organizations have sent back-office personnel to work from home during the pandemic, creating the need for automated payments, collection and reconciliation technology. In addition, in-office payments increasingly call for contactless technology.
Payments and patient engagement software provider RevSpring says it has expanded its merchant services to address those needs. The company has launched an integrated payment facilitation program, essentially leveraging the payment facilitator technology of Loyale Healthcare, a company it recently acquired.
Livonia, Mich.-based RevSpring acquired Loyale to help it establish a more streamlined "one bed, one bill" patient payment experience earlier this year, but is now using Loyale's payfac technology to extend client onboarding services.
"Payments technology in health care is not new, but the actions taken by RevSpring to enter business as a payment facilitator is new, and it represents a big step," said Mark Waring, senior associate with the Strawhecker Group.
A payment facilitator in a retail setting puts together contracts and handles transactions for a group of submerchants, essentially allowing smaller merchants to bypass a direct merchant contract with an acquiring bank or an independent sales organization.
For the health care payments sector, a payment facilitator would operate in the same manner, while representing a natural extension of another payments trend — software-as-a-service platform providers gaining traction through more commerce touchpoints, Waring said.
"SaaS companies provide platforms for selling, registration, business automation and all sorts of virtual interactions replacing traditional physical interactions," he added. "And those interactions result in the need for a payment."
Ultimately, it works to the benefit of the software providers to operate like payment facilitators because they are able to monetize those services for themselves and their clients, as opposed to traditional payment companies and major card brands keeping the financial benefits for themselves, Waring said.
As such, RevSpring describes its merchant services offering as "creating more of a retail-like environment with automated solutions," said Steve Callis, president of payments at RevSpring. The company's full suite of services fits nicely with large hospitals, while the merchant services offering will focus on mid-market and ambulatory services clients, Callis said.
In addition to establishing face-to-face contactless payments at a terminal — as well text, mobile, online and voice recognition — the technology also provides an option becoming increasingly common during the pandemic. It allows a patient in a car, waiting for an appointment while at the health care provider's office parking lot, to check-in and make a mobile payment from the car before entering the office.
"Our goal is to enable payment acceptance across any touchpoint that our provider wants to initiate and to do it in a secure environment," Callis said.
By wrapping in the ability to establish a merchant services account as a payments facilitator, RevSpring no longer has to rely on third parties to do that.
In addition, RevSpring has added a settlement-based reconciliation service that automates the payment reconciliation process, designed to eliminate errors or write-offs that often occur for health care providers.
As it would be for a retailer, the merchant services contract includes acceptance of all payment methods, including ACH and health care savings accounts. It also assures savings for processing services, and will fund deposits within 24 to 48 hours. Pre-service and post-service patient portals are included, as well as point-to-point encrypted devices for EMV chip, mobile and contactless payments.
But Callis acknowledges RevSpring still has to work with a card acquirer and processor to use payment rails "with a front-end authorization engine and back-end settlement engine."
The payment facilitator model allows his company to eliminate referring an acquirer or ISO to a potential prospect and instead taking care of all of the merchant account information and onboarding itself, leaving only the need to "connect my pipes to your pipes to run the transactions" with other providers, Callis said.
RevSpring, owned by private equity company GTCR, processed more than $5.5 billion in payments volume across its platforms last year, when combining revenue from the Loyale Healthcare acquisition.
Any use case that results in an interaction between a medical provider and a consumer creates a payment opportunity, and RevSpring "has wisely found a way to enable payments using current payments technology in mobile," Waring said.