Get the Details on Client Payment Solutions

Make sure you get all the details when a new payment option comes along and it’s marketed as the answer to all your client payment problems.

There is a new payment option that’s being marketed to veterinary practices that claims to help more pet owners afford costly care. The company says their monthly installment payment plans help veterinary clients who struggle with finances, and if your practice offers these plans, your clients won’t have to worry about veterinary costs anymore.

This new payment option is based on a version of the “Buy Now Pay Later” (BNPL) business model that has become quite popular in the past few years. While it seems straightforward and simple – your client is able to spread a large cost over time and your clinic gets paid upfront – there’s a little more to it than that, and it’s really important to know.

While it sounds like an ideal solution, some relevant details are missing.

How One “Buy Now Pay Later” Service Works for Your Clients

Understanding how different client payment options work can be confusing, to say the least.

While this BNPL service is marketed as an installment payment solution for even low-income veterinary clients, it most likely won’t help this demographic. The reason it won’t is because it only works for clients who already have a line of credit through Visa or MasterCard. In addition, they have to have enough available credit to cover the entire procedure cost upfront, or they will not be eligible for this option.

For example, let’s say you have a client whose pet’s dental treatment costs $500 – that’s pretty much the average cost for a dental in most full service, for-profit practices for a Grade 1 or 2 scale and polish without any extractions.

To be able to use this BNPL payment option, your client must 1) already have a major credit card, and 2) they must also have at least $500 of available credit on that card. If they don’t have these 2 things, they won’t be able to take advantage of this option.

If they do have these 2 things, they seemingly have the option to split that $500 up into smaller payments over time. However, a “hold” is placed on their credit card for the entire $500. In practical terms, your client has actually spent the $500, because that amount of credit is no longer available to them.

Each time your client makes a monthly payment using this service, that hold decreases by the amount of their payment. Let’s assume the client wants to pay $100 a month for 5 months. After they’ve made their first $100 monthly payment, that $500 hold becomes a $400 hold, then after the next monthly payment the hold is reduced to $300, then $200, etc. You get the picture.

Although the credit hold is disclosed when clients sign up for this BNPL service, many consumers don’t read or fully comprehend such details. They have the impression that they’re breaking a large cost down into smaller payments, without realizing that in terms of their available credit, they’ve actually already paid the full amount because of that credit hold.

If your client doesn’t clearly understand this, they may be in for quite a surprise when they attempt to use that card in a subsequent transaction elsewhere. If they’ve maxed out their credit line due to the credit hold, they won’t be able to purchase anything else. More than a few unhappy consumers have discovered this the hard way and were so distressed that they lodged formal complaints about it with the Better Business Bureau.

When a Payment Plan Isn’t Really a Payment Plan

In actuality, this BNPL “payment plan” isn’t really an installment payment plan at all. It’s simply a cash flow management tool for pet owners who already have a major credit card, an excellent credit score, and plenty of available credit. For these pet owners, this option might be helpful and convenient, since they can use an existing card, they’re not subject to a credit check, they won’t be charged additional interest, and they will still be able to make other purchases with their credit card because a credit hold isn’t problematic for people who have a high credit limit.

But these aren’t the pet owners who typically need help paying for care, or who really need to spread payments over time.

And let’s be honest: these aren’t the veterinary clients whose stories keep you awake at night, who break your heart because you really want to help them, who are the reason you regularly check Google looking for payment alternatives that more clients qualify for.

Pet owners who truly need a veterinary payment plan often have little or no access to credit.

If they even have a major credit card, it may be maxed out, or they’re close to their credit limit. If that weren’t the case, they would probably use that credit card to pay their vet bill, and they wouldn’t need a payment plan in the first place.

In addition to understanding the impact that this BNPL option will have on your clients, make sure you know how much it will cost your practice to offer this solution. Even though you’ll get paid upfront for the cost of services rendered to your client, you will likely pay an additional merchant fee. Find out if that fee is over and above the credit card processing fees you are already paying. When credit card fees are “layered,” it can get quite costly for your practice.

And here’s what’s really important to your practice: if a client is approved for this type of “payment plan,” consider whether it is truly cost effective for your hospital to pay those additional processing fees, just to offer this option as a convenience to those clients who have enough available credit to pay in full. Remember, that credit hold is basically equivalent to their paying in full anyway. Think about whether or not this means you’re offering – and paying a premium for –  a service that you don’t really need.

No “One Size Fits All:” Different Clients Need Different Payment Solutions

Make sure you get all the details when a new payment option comes along and it’s marketed as the answer to all your client payment problems. No client payment option is perfect, which is why your practice should offer a variety of financial solutions because every client’s needs are different. Not every payment option works for every client.

A good rule of thumb is to expect complete transparency. Ask any financial solutions provider you’re vetting to explicitly disclose exactly how much their services will cost your practice, and exactly how the service works for your clients. If clients have a negative experience with a third-party payment or financing business, it could damage their relationship with your veterinary hospital.

While there may be a legitimate place for a BNPL payment option in your practice, it might not deliver everything you hope for. Dig in, ask questions, and read the fine print so you know precisely how any new service will affect your practice and your clients.  If it seems to good to be true, it probably is.



How Does Buy Now, Pay Later Work? September 28, 2020. The Ascent: A Motley Fool Service. Accessed February 17, 2021.

BBB Consumer Reviews. Accessed February 17, 2020.

Splitit Review: Is the Installment Payment Service Worth It? July 3, 2020.  Accessed February 17, 2021.