Patient Payment Methods: A Security Overview for Healthcare Providers

When it comes to healthcare billing, a patient also assumes the role of a consumer. From decoding their medical bills to determine if each item is accurate, to understanding what, if anything, their insurance will cover, the consumer side of their patient experience may prove frustrating.

Research shows that when patients take on this consumer role, “their expectations for healthcare processes shift to mirror retail processes that provide fast, easy, and convenient service.” Secure, compliant, and easy-to-use payment systems fit the bill, giving patients a convenient, frustration-free healthcare payment experience. But which patient payment methods are right for your practice?

We’ll break down the most popular and secure patient payment methods, such as credit and debit cards, digital wallets, and insurance-based payments. We’ll also compare and contrast their respective security strengths and vulnerabilities. That way, you can offer a secure payment system (SPS) with modern payment solutions that safeguard your patients’ information while delivering the patient experience they want and deserve.

Why Payment Security Is Critical in Healthcare

Sensitive patient information is constantly transmitted and exchanged across the healthcare industry. Doing everything you can to protect it is vital. Such data protections also extend to payment processing. 

At the very least, a secure patient payment system requires multi-layer security protection, such as end-to-end encryption (E2EE) and point-to-point encryption (P2PE). Heightened security protocols are essential since patients’ financial data co-exists with their protected health information (PHI), creating a clear, high-value target for fraud and cybercrimes.

Compliance and Regulatory Frameworks

The Health Insurance Portability and Accountability Act (HIPAA) mandates that all “covered entities” protect their patients’ PHI from “unauthorized disclosure.” Healthcare providers, depending on their location, may also have to abide by state-specific data-protection laws.

You should observe the Payment Card Industry Data Security Standards (PCI DSS) to ensure that your patient payment methods and transactions are secure and compliant, 

These guidelines require all of the following and more:

• Securing patients’ cardholder data & only storing if necessary
• Maintaining the latest anti-virus software
• Limiting or restricting access to sensitive payment details
• Committing to testing payment security systems regularly
• Encrypting cardholder data

The healthcare industry is built on trust. Fraudulent activity or a data breach can eradicate the trust you’ve worked hard to build with your patients. Besides legal or regulatory penalties, word will get around, harming the ethos of your healthcare facility.

Comparing Security Across Common Patient Payment Methods

Cash Payments

Some patients may prefer to pay for their visit or services with cash. Other patients may not have a choice. According to the FDIC, more than 5.6 million households are unbanked. Paying directly with cash provides these patients with accessibility to healthcare services. It’s also ideal for those who prefer the inherent privacy that accompanies this payment method.

However, accepting direct cash payments comes with various risks. Besides costly and time-consuming cash-handling responsibilities, such as reconciliation and the manual errors that can occur, cash is also more vulnerable to theft. Once it’s gone, it’s usually gone for good. Plus, there’s no digital audit trail, so the risk of recouping any loss is slim to none.

Credit & Debit Cards

Unlike a direct cash payment, credit and debit cards are quick to use. All card payments are also traceable, allowing for greater transparency and preventing billing errors. These payment methods integrate easily with most Electronic Health Record (EHR) systems, streamlining the patient payment process.

With any payment method, there are risks. Not remaining compliant with PCI DSS can put patients’ private financial details at risk for phishing, identity theft, and other fraudulent activity. 

Healthcare facilities can mitigate, if not eliminate, such risks by implementing robust payment security protocols, including:

• Payment tokenization
• End-to-end encryption
• EMV chip technology
• Payment fraud detection system
• Multi-Factor Authentication

Digital Wallets (Apple Pay, Google Pay, etc.)

Research shows that the digital wallets segment of the healthcare digital payment market should “expand at the fastest CAGR” over other digital payment methods from 2025 through 2034. Not only are digital wallets highly secure and easy to use, but they’re convenient — no physical card necessary.  

Because of tokenization and biometric authentication, patients will experience a high level of security when paying with a digital wallet. Here’s how: Tokenization replaces their sensitive financial details with a unique one-use token that is of no value to cybercriminals. As for biometric authentication, a digital wallet may require the patient to simply verify their access via facial or fingerprint recognition.

Of course, digital wallets can come with a few risks, such as if the patient loses their device or if it’s stolen. Further, if they don’t have a strong password, much less biometric authentication set up, their data would be more vulnerable. Network outages such as failed Internet connectivity, power outages, or hardware failure can also disrupt the patient payment experience.

Implementing security countermeasures, like an encrypted payment system integration with your patient portal and enabling two-factor authentication, will protect your patients’ private payment details when they pay.

ACH Transfers and Bank Drafts

ACH bank transfers and bank drafts are a direct and affordable way to accept payment from your patients. However, due to payment (or refund) processing delays, they’re not the most convenient. Account fraud is even possible via unauthorized payment/debit requests or processing interference.

Implementing strict verification protocols and encryption will keep these transactions secure. Regular account monitoring and audits can also mitigate risks should fraud or a breach occur.

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

Accepting Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) will appeal to many of your patients. They’re popular for their ease of use and pre-tax contributions, often allowing patients to pay for any eligible medical expenses directly. 

However, the methods allowed for direct payment and refunds differ depending on the account, which can prove frustrating for patients. As a result, patients may experience payment delays or have to wait longer than necessary for a refund, etc. Lost or stolen cards and unauthorized usage are also risks with an HSA or FSA account.

Checks

While writing out a check to pay for healthcare services isn’t common in today’s digital-first world, this payment method is still appealing for certain patient demographics, such as those who are elderly. For one, checks are familiar, and they’re also traceable.

However, they’re not the fastest or most convenient payment method out there for patients or clinics. From the time it takes to write the check and verify their ID to payment remission when the check goes through the bank verification process— the process from start to finish clocks in at a snail’s pace. Checkbooks can also be stolen and signatures can be forged, further delaying payment processing.

Giving your check-holding patients faster and more secure, inclusive digital payment alternatives will accommodate them while expediting payment processing — a win-win for your patients and payment processing workflows.

Patient Portals

Patient portals are well known for improving patient engagement and satisfaction. They give patients one-stop access to their medical records, billing breakdowns, and the ability to make secure, online payments.

With your patients’ PHI and sensitive financial details comingling in a single portal, instituting extra data security measures, such as MFA and strong encryption, will protect their data and keep your clinic compliant with HIPAA and other laws and regulations. As an extra layer of security, ensure your software is always up to date. You could also commit to regular penetration testing to better prepare for a cyber attack (if one should occur).

How Cash-to-Card Kiosks Improve Payment Security

You can significantly improve payment security for your patients by offering a more modern and inclusive means to pay their way. Ready Credit’s Cash-to-Card® Kiosks accommodate your cash-preferred (and cash-only) patients by allowing them to simply convert a designated amount of cash into a prepaid debit card right there in your facility. Not only can they still pay in cash, but they’ll also enjoy the benefits of a more modern and highly secure patient payment experience.

These prepaid cards can be used anywhere prepaid debit cards are accepted, not just within your facility. That means patients can conveniently use their ReadyCARD® for purchases across your entire hospital ecosystem, from the gift shop and café to the pharmacy and parking ramp, or at any location that accepts debit payments.

While fortified with superior security protection protocols, like transaction monitoring, encryption, and role-based access controls, Cash-to-Card Kiosks do not collect or store your patients’ PHI. Patients can securely and discretely insert cash and load their desired balance onto a ReadyCARD® prepaid debit card. Cash-to-Card Kiosks accommodate your cash-preferred customers while also providing them with a secure and traceable way to pay for their medical treatments and services.

Security Best Practices for Managing Patient Payments

You’ll want to implement the most effective security best practices to safely and efficiently manage payments and refunds for your patients. In addition to providing access to an encrypted POS system that is PCI-compliant, you’ll also want to:

• Enable real-time fraud detection capabilities for safer and more secure transactions.
• Commit to ongoing staff training to enhance their ability to recognize fraudulent activity, social engineering, phishing attempts, and more.
• Schedule regular penetration tests and security audits for optimal staff readiness, should a cyber attack occur.
• Offer patients automated and secure refunds and insurance reimbursements with ReadyPAYOUTS®.

Choosing the Right Solutions for Patient Trust and Compliance

The healthcare profession is built on trust. From practitioner-patient confidentiality to access to secure and secure digital payment options, your patients want to know they’re in good hands in more ways than one. Deploying visible security measures that show their PHI and sensitive financial data are protected will prove that they are.

To give your patients peace of mind, choose a digital payment vendor that prioritizes your patients’ data security. Start by assessing their encryption standards, disaster-recovery protocols, and compliance certifications. But to find the best digital payment vendor ideal for all of your patients, you’ll need inclusive payment solutions that do the above and so much more.