What Are the Best Payment Processors for HSA Transactions?

Businesses generally have three common needs when it comes to processing HSA payments.

The first is the ability to accept HSA cards, online and/or in-person. Then, there’s the ability to process eligible items only and/or mixed carts with both eligible and non-eligible items. Processors also often need to support customers who pay out-of-pocket and hope to get reimbursed later. These customers require detailed receipts and product descriptions. The retailer must be able to deliver on these documentation expectations. HSA payment processing isn’t just about accepting payments. It also includes split payments, returns and exchanges, subscriptions, and chargebacks.

Medical payment processing and healthcare payment processing may focus on patient billing (in clinics, doctors’ offices, or hospitals), while businesses accepting HSA transactions require processors designed for retail environments.

Look for these eight features in payment processing platforms for HSA cards.

Support for eligible-only items. The processor can facilitate default eligible items and mixed carts.

Strong integration options. The processor can integrate well with in-person terminals and online platforms like Shopify, Woo, and BigCommerce.

Clear refund support. It can handle refunds and partial refunds to the correct account, so records will match the final amount a customer paid.

Detailed reporting. The processor includes details like tender type, transaction metadata, and settlement reports, so the merchant (and customers) keeps clear records.

Dispute tools and customer support: The processor can handle chargebacks, and also has helpful customer support in case issues arise.

A solid security baseline. Since you’re handling sensitive and personal details, the processor should align with the Payment Card Industry (PCI) security standards and have fraud prevention mechanisms in place.

Different types of payment processors for HSA transactions work better for different businesses. The best fit could depend on the transaction volume or how sophisticated the system needs to be to handle HSA transactions (i.e., eligibility).

A general-purpose payment processor works for businesses that sell direct-to-consumer (DTC) health items, and businesses that sell HSA-eligible items alongside other products. These processors offer flexible e-commerce integration and can handle a lot of transactions. Confirm whether this payment processor can handle mixed carts.

Healthcare-focused payment processors are best for clinics that do patient billing. However, they may not fit retail checkout needs, as health retailers need processors that can handle item-level HSA eligibility.

Merchant acquirer-led setups offer a higher amount of control over approvals. This system is beneficial for hybrid businesses or those selling high-ticket items, where there may be specialized eligibility situations..

Payment Processor Shortlist: Candidates to Evaluate

Best for Health Retailers

Square

• Best for small to medium-sized health retailers selling direct to customers (DTC)
• Online and in-person processing
• Supports HSA/FSA cards and eligible-item transactions
• Digital, print, and decline receipts; refund capabilities
• Free invoicing, recurring billing, and online checkout
  • Monthly fees $0-$60, waived chargeback fees up to $250 monthly
  • Flat-rate pricing. Can get expensive with large volumes of transactions

Stax

• Best for large-volume health retailers
• Online and in-person processing
• Supports HSA/FSA payments
• Online and print receipts; refund capabilities (including partial)
  • Wide range of payment and billing tools
• Subscription-based pricing at $99/month; transparent pricing; interchange-plus pricing

PaymentCloud

• Best for high-risk health retail
• Online and in-person processing
• Supports HSA/FSA payments
• Receipts and refunds
  • Extensive payment gateway and integrations
• Pricing varies; processing fee 2-5%, depending on risk; virtual terminal additional fee

Best for Providers/Clinics

Jane Payments

• Best for all-in-one wellness providers and patient management (physiotherapy, mental health providers, chiropractors, etc.)
• Online and in-person processing
• Supports HSA/FSA payments
• Issues invoices and monitors insurance claims in the same place; can issue refunds
• Plans start at $40/month; 2.85% + $0.25 for online transactions and 2.6% + $0.10 for in-person

Ivy Pay

• Best for small therapy practices
• Remote, mobile-pay offerings
• HSA/FSA cards accepted
• Limited ability to generate detailed invoices
• No monthly fees, no contract fees; low card processing fee

InstaMed (by Chase)

• Best for clinics or hybrid
• Online and in-person processing
• Supports HSA/FSA cards, insurance billing, and patient payments
• Can process refunds; integrates well with Chase Payment Solutions (geared to retailers)
• Custom pricing depending on the organization

Always confirm HSA/FSA acceptance requirements with the processor before deciding.

Best Implementation: How to Get Set Up Without Surprises

Accepting HSA and FSA payments seems complicated, but the general step-by-step process to set up a payment processor can be straightforward.

Confirm the eligibility of what you’re selling.

Are you selling services, products, or a mix of eligible/non-eligible items? Some items are automatically HSA-eligible, like prescriptions. To be considered, other items may require supporting documentation, like a Letter of Medical Necessity from an independent licensed practitioner. HSA-eligible items are considered a qualified medical expense by the IRS and compliant with the customer’s plan. Merchants must be responsible for collecting and storing this information in a HIPAA-compliant manner.

Confirm the merchant configuration with your processor

Validate your merchant category code (MCC) with your payment processor. Approved healthcare merchants with the associated MCCs can enable HSA-eligible products to be pre-approved at checkout. Ensure the merchant account underwriting fits with the risk of the items you sell. MCCs help HSA cards route correctly and reduce automatic declines, but they do not determine final eligibility.

Map your checkout flows

What is it like to check out with eligible-only items? How does the system handle mixed carts or split payments? How about subscriptions? Go through each situation, and ensure the system provides clean receipts or invoices that match the final paid amount.

Test common scenarios

Beyond purchase transactions, test common scenarios where processes might be more complicated: partial refunds, exchanges, and failed authorizations. Create a step-by-step plan for how to handle these scenarios.

Train support

Map out a step-by-step plan for complicated scenarios and train employees or customer support on how to navigate any difficulties. Document what to do if a card declines. Here’s a quick decline troubleshooting checklist:

• Check merchant configuration alignment (MCCs, product SKUs, ability to accept HSA cards, etc.)
• Check item eligibility with HSA funds
• Try separate transactions for mixed carts
• Customers should refer to their plan rules for item eligibility.

For more, read our guide on how to accept HSA/FSA payments.

Consider the fine print before finalizing a payment processor. Which pricing structure works best: monthly platform fees, a flat rate, or interchange-plus pricing (a combination of the interchange rate, set by card networks, and the processor’s markup)? Be aware of possible hidden costs to setting up the system, like gateway fees, device rentals, chargeback fees or PCI non-compliance fees.

Consider payout timing—when money from sales actually reaches your account—as well as reserves from payouts, especially for higher-ticket items. Know the subscription billing terms for recurring, subscription-based charges, as well as refund policies. Understand what supports are in place so that in the instance of declines or disputes, there is customer service to assist.

An item’s eligibility is always contingent on a customer’s plan policy and whether they have supporting documentation to make the claim—not the payment processor. So businesses and customers stay compliant, issue itemized receipts or invoices with the date, amount paid after discounts*, and keep records of refunds and exchanges being reconciled. Don’t submit a receipt for reimbursement for more than the final amount paid.

There is a security baseline to meet as merchants, including PCI expectations and standards to safely handle all payment data. Confirm your payment processor meets these standards to stay compliant. Minimize PHI in payment workflows and confirm you’ve met the vendor responsibility requirements, like signing a Business Associate Agreement.

*Truemed is for qualified customers. HSA/FSA tax savings vary. Learn more at truemed.com/disclosures.

Truemed* makes finding and purchasing HSA/FSA-eligible items easier. Qualified customers may be able to use HSA or FSA funds for certain products, depending on medical need and plan rules. The cost of Truemed’s services is included in the purchase price. Qualified customers can complete a clinical intake form, which is reviewed by an independent licensed practitioner who may issue a Letter of Medical Necessity when appropriate. Plan administrators make the final decisions on reimbursement eligibility. Always save itemized receipts and any applicable LMNs. Remember, follow all the plan submission requirements.

*Truemed is for qualified customers. See terms at truemed.com/disclosures.