Unlock Business Bliss with Spa Credit Card Processing Solutions

The spa. These two words carry connotations of rest, relaxation, and rejuvenation for consumers. Of course, only some things in life are free. For everything else—spa treatments included—there’s Mastercard…and Visa, American Express, and Discover. Spa credit card processing allows spa owners to collect payment for services rendered. 

Spa payments will often be for a la carte items—a customer who wants a massage, facial, or burning hot rocks placed on their back (officially called a hot stone massage). But spa and salon credit card processing could also include recurring billing, such as for a subscription service. 

In such cases, customers pay a monthly fee to access the spa location and enjoy its services. There may be a combination of the two payment modalities: a la carte and subscription services. For example, you could grant spa members access to certain basic features, with the option of ordering extra a la carte items. A snack, juice, and smoothie bar inside the spa lobby is one example.

Whether payment is a one-off or automatically recurring, a point of sale or POS system (hardware and software) is what helps you accept credit card payments (and debit card payments).  

Salon or Spa Industry Overview

There are a little over 20,000 health and wellness spas across the United States as of 2023. This was a slight increase of just 0.2% from the previous year. This slight increase shows that the spa business—although arguably a consumer discretionary like restaurants and entertainment—is very stable.

It may not see the rapid growth of other industries. But it’s also noteworthy that in the recessionary economic climate that has unfolded since COVID-19, the number of spas has not declined. Compare this to many other industries that have collectively shuttered hundreds or thousands of locations. Spas are alive, well, and sizzling with hot rocks on a bare back.

This may speak to the idea that spas are not actually discretionary. While most consumers view them as such, spa treatments have long been a key part of preventative medicine. For thousands of years, cultures around the world have used hot baths, massages, and the application of topicals to cultivate a state of general good health.

In recent years, there has been a fusion of spa treatments and Western medicine (e.g., surgery and similar address of acute incidents). There is also a significant portion of med spa treatments that are aesthetic. The most popular treatments include chemical peels, aesthetic services, botox and filter injections, microdermabrasion, photo-facial pulsed light, skin tightening, body contouring or cellulite reduction, and laser skin resurfacing.

As you can see, many of these treatments are elective sorts of surgeries. Customers’ healthcare insurance does not cover most, if not any, of these procedures. However, the customer may have compelling personal reasons for desiring the treatment. They want to pay for it but may not have the hundreds or thousands of dollars it can cost.

Monthly Payments and Other Payment Options

This is once again where payment processing can come into play. In addition to helping you take debit and credit cards, certain payment processors or merchant service providers can also help you set up payment plans or even BNPL or buy now, pay later options. 

Some industries call this a point-of-sale loan. Alternatively, the customer could enroll in a repayment plan that automatically collects monthly payments. Let’s start with the BNPL or point-of-sale financing. 

With this option, the customer answers a few brief questions for the payment processor. The payment processor’s lending partner then provides you (the spa owner) full payment for the services within 24-48 hours. The customer is then responsible for making payments to the lender.

Customer approval for these types of loans is usually much easier than for a CareCredit credit card. There is no credit check with POS loans (usually). Unless the customer has some sort of fraud alert or is on a terrorist watch list, they’ll probably get the loan. This means that you can go ahead with the treatment and get sculpting.

An In-House Repayment Plan

The other type of repayment plan does not involve a lender. You will enroll the customer in some sort of schedule of automated payments. Do not confuse this with sending a monthly paper bill, which the customer must respond to. Rather, you can collect payment details at the point of sale and have the client sign an agreement to pay a certain amount every month.

The best way is to accept payments from their checking account. Credit and debit card numbers change over time, especially if the customer loses them. By contrast, bank account numbers are permanent. 

You can eliminate the potential for payment discontinuity by setting up the repayment plan with a checking account. These are ACH payments (automated clearinghouse payments).

Payment Plans Make Certain Spa Treatments Accessible

The financing and the repayment plans are great options for spa customers who cannot afford an expensive treatment. On the “lower end,” a typical botox treatment, for example, runs $300 to $600. In the middle, cellulite treatments run from $3,000 to $5,000 a session. And most cellulite treatments require multiple sessions. On the higher end, plastic surgeries (if performed at your spa clinic) can run into tens of thousands of dollars.

The average spa customer probably has a decent amount of discretionary income. Otherwise, they wouldn’t be paying $150 to have burning hot stones placed on their back. However, even customers with discretionary incomes may not be able to pay $5,000 to get that cellulite removed.

With inflation and the failure of real wages to outpace the cost of living, consumers are increasingly strapped. In fact, nearly 57% of American consumers have less than $1,000 in savings for emergencies, let alone elective procedures.

This is where financing or repayment plans come into play. Retail experts (a somewhat broad and ambiguous term) believe that BNPL options boost sales by 20-30% and increase ticket sizes by at least 50%. Consider these statistics when considering selling some of your more high-end services.

Example of a Payment Plan At Work

Imagine you have a customer who is interested in a botox treatment. You could have a free consultation with the customer to give them an estimate. Sitting in your office, you could discuss the estimate and how the procedure would work. When you roll out the price, you could mention your repayment plans.

First, you could have the customer apply for a POS loan, informing them that it does not involve a credit check or impact their credit (consult with your payment processor for these details because, in some instances, it may). If that doesn’t work, you could move to the backup plan of an in-house repayment plan.

You want to see if you can score the POS financing first because that will immediately get you paid. But even if you can’t, you can fall back on the payment plan. This will allow you to collect payment over time.

The downside here is that you risk the repayment turning into “bad debt,” a problem that plagues the healthcare industry. The good news here, however, is that, once again, spa payment processing can help increase the likelihood of completed payments. That’s because the payment processor can facilitate collecting payment information up front and storing it on file for automated, recurring payments.

Spa Subscription Services

This brings us to our next point, which is subscription services. Just like with a repayment plan, subscriptions require saving customer payment information. The payment processor that runs your salon POS can facilitate this storage. That’s because rules and regulations around storing customer credit and debit card information are complicated and costly to enforce.

These rules and regulations are PCI DSS compliance or Payment Card Industry Data Security Standards. These are rules set forth by Visa and Mastercard. Some of these rules are procedural, such as not storing customer card numbers in unlocked locations (if stored on paper). But others are in the realm of technology, such as having the latest and most up-to-date cybersecurity tools and firewalls.

This can become cost-burdensome or cost-prohibitive for a small business. It is much easier to let a payment processor handle the PCI DSS. They can securely store customer payment information by hiding customer data behind secure digital boundaries and tokenizing the information. Tokenizing involves turning information (in this case, a credit card number) into randomized, garbled information.

The token can only be “unscrambled” by the party with a key to decode it. In this case, that would be the payment processor. While the data is inactive (e.g., anytime it’s not being used to make a payment), it is inaccessible and incomprehensible to potential cyber-criminals.

How Subscriptions Can Help Your Spa Business

Subscriptions could significantly improve spa revenue by encouraging customers to come regularly. By contrast, relying on a la carte sales may mean that customers only come in 1-2 times a year for some hot, sizzling rocks on their back. A subscription paid monthly means (not only consistent cash flow for you) but that they will take advantage of the subscription to come in more often (at least once a month).

Subscriptions are also a great way to build community, especially in the brick-and-mortar setting of a spa. You could have event nights like a wine and cheese gathering for subscribers. You could also offer discounts on further purchases of a la carte items. As such, you may want to refer to subscriptions as memberships.

These memberships could be tiered as well. For instance, a bronze membership might grant access to a monthly massage, steam, and sauna rooms by appointment. A silver membership might grant all the above, plus two free facials. A gold membership might include two free massages, two facials, steam and sauna access, and up to five complimentary monthly smoothies.

You can really do what you’d like with the tiers in terms of incorporating what your particular spa has to offer. You can also decide if you want to charge membership premiums on a monthly or annual basis. You can also give customers the option of deciding, with a discount for the annual membership. This popular format with subscription services can encourage customers to provide up-front cash flow to the business they subscribe to.

Contactless and Mobile Payments

Spa and salon POS systems should also be contactless. Contactless payments are now one of the most preferred modes of payment for consumers. At least 35% of consumers who use contactless payments regularly do so for hygienic concerns. The upshot of these findings is that the other 65% may use them for other reasons, such as convenience.

Are Contactless Payments Secure?

This means that contactless payments are also very secure. The radio waves only facilitate nearby communication. This means a third party cannot intercept the transmitted information, unlike card skimming and shimming.

Card skimming involves installing a small device inside a POS to collect payment data. Card shimming involves the same thing within the place to insert an EMV chip. These devices collect static, unchanging data from the card. Criminals then use this to replicate a fake card or use the information to shop online. Alternatively, they might sell it.

Card skimming and shimming usually occur in poorly monitored settings such as gas stations. It is unlikely that skimmers would install a device in a spa, especially since it is only open during certain hours. However, card skimming has indeed occurred in spa settings. Moreover, spa customers are lucrative opportunities for thieves since they are often individuals with discretionary incomes.

However, card skimming and shimming are mostly irrelevant with contactless payments. These forms of payment are also encrypted, meaning that the information is garbled before being passed on. It has to be decoded by the intended party, which, in this case, is the payment processor, card networks, and banks facilitating the payment. Each transaction has its own randomized code, making copies of the card useless for future purchases.

One last word about contactless payments: if your spa includes a nail salon, this is a must. If someone just got their nails done (or did, depending on your clientele), they do not want to mess them up by rummaging around their purse for their wallet and then rummaging around their wallet for their card. Keep your credit card processing for salons simple with contactless payments.

Online Booking and Appointment Setting

Another consideration for spas is the ability of the payment processor to integrate with appointment-setting software. Ideally, customers should be able to make payments online when they book their appointment. Prepayment makes appointments more seamless since customers can leave after their treatment. No need to stop at the front desk. 

These same considerations are important for nail and/or hair salons, whether or not they are part of a spa. If customers can book appointments and pay for them online, these appointments can go into your calendar so that you can plan out your week in terms of staffing.

This type of functionality is achieved with an online payment gateway. Customers can also access the online payment gateway from their smartphones using a QR code. This type of code is a checkerboard pattern of squares that customers can scan with their smartphone camera. QR codes then direct customers to a webpage to pay or schedule their next appointment.

Integrating the POS with appointment setting is common in other parts of the healthcare landscape. Medical billing involves using the right code for the treatment rendered. While you may not involve medical billing at your business, integrating the appointment setting with your spa credit card processing services can ensure you charge the client the right amount.

Bookkeeping and Accounting Integrations

Your spa credit card processing should also integrate with your accounting software. This can reduce the time spent manually transferring data from your POS to Quickbooks. Around 40% of business owners spend 80 hours or more on tax prep each year.

Integrating the POS with the accounting suite can reduce a significant amount of this work and errors. Eighty hours is a lot of time, perhaps equivalent to half a week in Aruba. And even if you’re not doing the accounting yourself, you may be able to save money on your accounting fees if your accountant has less to do.

Loyalty and Rewards Programs

Earlier, we mentioned the idea of memberships and subscriptions. Loyalty programs are also a great way to incentivize customer visits. You can issue rewards as points for purchases or by visit.

You can differentiate points based on what the customer paid for. A facial might be ten points, while a sizzling hot stone massage might be twenty. Once the customer has reached 100 points, they get a free massage or something at your discretion.

Rewards programs based on visits are similar. A customer might get a free massage on their tenth visit or something like that. While you can iron out the particulars of the rewards program according to your spa and your means, the premise is the same: gaining repeat business.

Some loyalty programs can increase the value of each customer by 10-15% annually. Yes, it’s true you’re giving stuff away. But customers have to buy a lot more stuff to get free stuff, so in the end, you come out far ahead. And by “stuff,” we mean hot, sizzling rocks placed on their back for therapeutic reasons, of course. 

You could also incentivize gift cards around certain holidays, such as Valentine’s Day, Mother’s Day, and Christmas. These incentives could be: purchase a $100 gift card and receive 25% off your next appointment, etc. 

Spa Credit Card Processing: A Wrap-Up

Now that we’ve referenced hot stone massages at least five times let’s bring it to a close. Spa credit card processing should consider a few things: contactless payments, online booking, subscriptions, payment plans, and rewards programs, to name a few.

Another thing that spas should consider when choosing a payment processor is customer service. Many small businesses have fallen into the trap of working with a payment aggregator like Square, Stripe, or PayPal. These companies do not offer good customer service, in addition to charging rates that are not a good fit for merchants.

An individual payment processing company (rather than a large payment aggregator) is often a better fit for small businesses. That’s because there is an account manager to serve as a point person for questions or troubleshooting.

The account manager is also familiar with your industry and how to proactively address some of the challenges that might arise in the payment landscape. To learn more about how we can help with Spa POS systems, give us a call or contact us using the form below.

Frequently Asked Questions For Spa Credit Card Processing