Best HIPAA Compliant Payment Processing Methods in 2025

Manually managing payments, invoices, and billing can quickly become overwhelming for busy therapists. As the mental health industry moves further into digital care, choosing HIPAA-compliant payment methods is now essential—not just for efficiency, but for protecting client confidentiality.

In this guide, we’ll explore the best HIPAA-compliant payment processing solutions in 2025, their key features, and what to look for when selecting the right fit for your practice.

And while billing tools handle the financial side, Mentalyc takes care of the clinical side – helping you document sessions, track progress, and store client data safely in a HIPAA-compliant platform.

Key Security Features in HIPAA-Compliant Payment Solutions

Your payment processing platform might not transmit client health records. However, the platform will handle personally identifiable information like names and contact details. As a therapist, it is your responsibility to ensure these details are kept safe. Most especially, if you are using EHR systems with client portals and integrated payment processing. Some of the top features of HIPAA Compliant Payment Processing Methods include:

Security Feature	What It Does	Why It Matters for You
Tokenization	Replaces sensitive payment information (like card numbers) with randomly generated alphanumeric codes stored outside the main system.	Prevents hackers from accessing real client payment data, even if the system is breached.
Data Encryption	Converts payment data into coded messages that can only be decrypted by authorized systems or processors.	Ensures client payment details are unreadable to unauthorized users, maintaining HIPAA and PCI compliance.
Multi-Factor Authentication (MFA)	Adds extra layers of login security using methods like passwords, OTPs, or biometric verification.	Protects access to payment portals and client billing data, reducing the risk of unauthorized access.
Access Control & Role Permissions	Limits data visibility based on user roles and responsibilities within a practice.	Helps maintain the HIPAA “minimum necessary” standard, only authorized staff can view sensitive data.
Audit Logs & Monitoring	Tracks all payment activity, login attempts, and system changes in real time.	Supports accountability, compliance audits, and early detection of suspicious behavior.

Security Measures in HIPAA Compliant Payment Processing Systems

HIPAA vs PCI DSS: Key Compliance Differences

Category	HIPAA (Health Insurance Portability and Accountability Act)	PCI DSS (Payment Card Industry Data Security Standard)
Purpose	Protects the privacy and security of Protected Health Information (PHI) in healthcare and mental health settings.	Secures cardholder data during payment processing to prevent fraud and breaches.
Applies To	Healthcare providers, therapists, EHR vendors, and business associates handling PHI.	Any organization that stores, processes, or transmits payment card data.
Core Regulations	Privacy Rule, Security Rule, and Breach Notification Rule.	12 Core Security Requirements for data protection and fraud prevention.
Data Covered	Patient health records, treatment data, billing information, and other PHI.	Credit/debit card numbers, expiration dates, and transaction data.
Key Security Measures	Encryption, secure access controls, audit logs, and breach response protocols.	Tokenization, firewalls, encryption, and continuous vulnerability monitoring.
Access Controls	Follows the “least privilege” principle — access only for authorized personnel.	Restricts system and network access to authorized card-processing staff.
Compliance Enforcement	Enforced by the U.S. Department of Health and Human Services (HHS).	Enforced by major card networks (Visa, Mastercard, Amex, etc.).
Penalties for Non-Compliance	Civil and criminal penalties, up to $1.5 million per year for violations.	Fines up to $500,000 per incident and potential loss of card processing privileges.

Why HIPAA and PCI Compliance Both Matter

For mental health professionals, protecting client information goes beyond maintaining trust—it’s a legal and ethical responsibility. HIPAA and PCI DSS compliance work hand in hand to safeguard both the clinical and financial sides of your practice.

While HIPAA focuses on keeping your clients’ protected health information (PHI) confidential, PCI DSS ensures that any payment data, like credit card details, remains secure during transactions. Together, these frameworks create a complete security shield that prevents data breaches, financial fraud, and costly penalties.

Top HIPAA-Compliant Payment Processing Systems for Therapists in 2025

Payment Processor	Best For	Key Features	Pros	Cons
Rectangle Health	Mid- to large-size practices needing EHR integration	Automated payment plans, EHR integration, contactless payments	Reduces admin workload, protects client data, flexible payment options	High upfront cost, healthcare-only use
Ivy Pay	Solo and small private practices	One-time and recurring payments, client onboarding, digital receipts	Tailored for therapists, fast payouts, easy to use	Limited payment methods, no desktop version, minimal support
Authorize.Net	Multi-industry and hybrid practices	Supports credit cards, e-checks, digital wallets; integrates with POS and websites	Accepts many payment types, strong security, good support	Setup fees, limited currencies, lengthy setup
Chase	Cost-conscious practices needing security and speed	Fraud detection, encryption, PCI compliance, invoicing integration	Multiple payment options, no monthly fees, user-friendly	Limited international support, high non-Chase fees, complex setup
Square	Small to medium practices needing simplicity	Accepts cards, ACH, and contactless; analytics and reporting tools	Easy setup, flexible payments, intuitive UI	Costly for high volume, limited support, less ideal for large clinics
Stax	Growing or high-volume practices	Virtual terminal, invoicing, recurring billing, analytics	Transparent pricing, robust reporting, scalable for large teams	U.S.-only, complex for small users, high monthly fees
ACH Payments	Practices preferring direct deposits or B2B billing	Recurring billing, bank-to-bank transfers, strong encryption	Secure, convenient for recurring or B2B payments	Slow processing, U.S.-only, not real-time
Jane	Practices already using Jane PMS	Integrated billing and invoicing, customizable payment policies	Automates recurring payments, client portal, flexible options	Restricted to Jane users, expensive for larger caseloads
Elavon	Practices with international clients	Global coverage, real-time reporting, advanced analytics	Excellent support, operates in 30+ countries, secure	High fees, complex setup, technical learning curve
Vagaro	Small to medium therapy and wellness practices	HIPAA + PCI-DSS compliance, mobile app, third-party integrations	Easy to use, strong customer support, secure	Steep learning curve, limited customization, costly for small users

1. Rectangle Health

Rectangle Health is a HIPAA-compliant payment processing solution for the mental healthcare industry. It seamlessly integrates with EHRs, making it easier for practices to manage payments. With its robust support for credit cards, debit cards, and contactless payments, Rectangle Health enhances flexibility. It also has automated payment plans, which make it easier for clients to pay in installments.

Pros of Rectangle Health	Cons of Rectangle Health
Automated payment plans for flexible client billing	High initial costs for smaller practices
Reduces administrative workload and simplifies payment management	Restricted to use within the healthcare industry
Protects client data with strong encryption and HIPAA compliance

2. Ivy Pay

IvyPay is a payment processing system tailored to meet the needs of therapists. It is great for solo practitioners. The system supports one-time and recurring payment plans. This makes it easier for clients to use it for regular therapy sessions. Ivy Pay is a HIPAA-compliant software that prioritizes security and confidentiality. Some of its most used features include client onboarding tools, digital receipts, and real-time tracking.

Pros of Ivy Pay	Cons of Ivy Pay
Tailored specifically for therapists and mental health practitioners	Limited payment method options
Easy to use with fast, prompt payments	Lacks comprehensive billing features
Supports one-time and recurring payment plans	No desktop version and limited customer support

3. Authorize.Net

Authorize.net is a United States-based HIPAA-Compliant payment processing method that assists with your practice growth. It supports several payment methods like credit cards, e-checks, and digital wallets. Authorize.net integrates seamlessly with mobile apps, websites, and POS systems. This makes it a suitable solution for different types of industries and business types.

Pros of Authorize.Net	Cons of Authorize.Net
Accepts multiple payment types, including credit cards, e-checks, and digital wallets	Limited currency support
Strong security and compliance standards	Charges setup and monthly gateway fees
Excellent customer support	Time-consuming setup process

4. Chase

Chase is a cost-effective HIPAA-Compliant payment processing method that emphasizes secure transactions. It integrates seamlessly with several invoicing systems and makes transactions faster and easier. Chase employs security mechanisms like fraud detection, encryption, and PCI compliance. This ensures that your client data is safe from breaches.

Pros of Chase	Cons of Chase
Supports multiple payment options	Limited international transactions
No monthly service fees	Higher transaction fees for non-Chase accounts
Easy to use with strong encryption and fraud protection	Complex setup for smaller practices

5. Square

Square is an all-inclusive payment processing method. It supports several payment options like credit cards, ACH bank transfers, debit cards, and contactless payments. Simplicity is a core theme of the square platform. After downloading, it is easy to set up and use for your transactions.

Pros of Square	Cons of Square
Intuitive user interface	Pricey for high-volume transactions
Flexible payment options	Limited customer support
Built-in analytics and reporting tools	Less ideal for medium and large practices

6. Stax

Stax is a robust payment-processing method for practices that need cost-effective and scalable payment-processing tools. It has several features that enhance in-person and online transactions. Some of these include support for virtual terminals, invoicing, mobile payments, and recurring billing. Stax uses a transparent monthly subscription with no hidden charges. This reduces the transaction costs large practices have to pay for the software.

Pros of Stax	Cons of Stax
Cost-effective for large practices	Limited to practices in the U.S.
Excellent reporting and analytics tools	Complex setup for smaller practices
Flexible payment options	Pricey monthly subscription for low caseloads

7. ACH Payment Method (Bank Transfers)

The ACH (Automated Clearing House) payment method enables secure, direct bank-to-bank transactions commonly used for recurring billing, direct deposits, and B2B payments. Instead of routing funds through credit card networks, ACH transfers move money electronically between financial institutions, offering lower transaction fees and reduced reliance on physical checks.

While ACH isn’t a standalone platform, many HIPAA-compliant payment processors (like Stax, Rectangle Health, or Square) offer ACH transfer options to make payments smoother for therapy practices.

Pros of ACH Payments	Cons of ACH Payments
Supports recurring and automated billing	Slower processing times (1–3 business days)
Convenient for B2B	Restricted to U.S.-based practices
Uses strong encryption protocols	Not suitable for real-time transactions

8. Jane

Jane is an all-in-one practice management software (PMS) for healthcare providers. It manages billing and invoicing with its integrated payment processing method. Its client portal enables seamless online and in-person payment. Jane has customizable payment policies for mental health practitioners. With this HIPAA-Compliant payment processing method, practices don’t need to get third-party payment systems.

Pros of Jane	Cons of Jane
Supports automation of recurring payments	Restricted to Jane users
Intuitive user interface	Pricey for larger practices
Flexible payment options	Limited customization for payment reports

9. Elavon

Elavon is a global payment processing system with strong adherence to HIPAA standards. It combines advanced processing tools and real-time reporting tools. It keeps its users informed about their financial status over time. Additionally, it has real-time financial tracking that ensures no hidden transactions without users knowledge.

Pros of Elavon	Cons of Elavon
Excellent customer support	High transaction fees
Operates in over 30 countries	Complex pricing structure
Compliance with security standards	Requires technical expertise to set up

10. Vagaro

Vagaro is a user-friendly payment processing software for service-based industries. It enhances secure transactions by complying with HIPAA and PCI-DSS standards. Vagaro integrates seamlessly with third-party websites and applications. This makes it easier for your clients to make payments.

Pros of Vagaro	Cons of Vagaro
Fully HIPAA and PCI-DSS compliant	Steep learning curve
Functional mobile app	Limited customization options
Strong customer support	Expensive for small practices

Benefits of Using HIPAA-Compliant Payment Methods in 2025

For private practices and telehealth providers, HIPAA-compliant platforms also streamline invoicing, payment tracking, and EHR integration, allowing smoother workflows and faster payments. In short, they make it easier to balance compliance, convenience, and client trust. Here are some benefits of using HIIPAA-Compliant payment processing methods:

Security For Your Client Data

HIPAA-compliant payment methods employ encryption and secure data storage. This ensures that your client’s sensitive information is protected. These systems also ensure that the Electronic protected health information (ePHI) isn’t carelessly exposed to unauthorized persons who could tamper with the data.

Increases Client Trust

Using HIPAA-Compliant payment processing methods increases your clients’ trust in your practice. It lets clients know that you care about their privacy and the confidentiality of their data.

Reduced Risk of Data Breaches

Using HIPAA-compliant payment processing methods ensures that only the right personnel can view the data. In cases where incidents occur, payment platforms with HIPAA compliance have established protocols to handle the situation. These protocols ensure the incident is mitigated almost immediately after it occurs.

Increases Your Operational Efficiency

HIPAA-compliant payment processing systems reduce human errors in your private practice. This leads to greater efficiency by saving you the time you will have used to correct errors.

It Gives You a Competitive Advantage

Mental healthcare providers and clients prefer to relate to practices that prioritize security. As a therapist, this will lead to attracting more clients without much effort.

Conclusion

By choosing HIPAA-compliant payment processing systems, therapists ensure that every transaction aligns with the highest standards of security and confidentiality. These tools not only prevent breaches but also streamline administrative tasks and improve the client experience.

And while billing tools handle the financial side, it’s equally important to have a secure, HIPAA-compliant platform for documentation. **Mentalyc** helps therapists manage document sessions, track progress, and store client data safely in a HIPAA-compliant platform.

FAQs on HIPAA-Compliant Payment Processing

What payment methods are HIPAA compliant?

HIPAA-compliant payment methods include platforms that sign a Business Associate Agreement (BAA) and use strong data encryption and PCI DSS security standards. Examples are Rectangle Health, Ivy Pay, Stax, and Chase Health Solutions—all trusted HIPAA compliant payment processors offering secure online payments for healthcare and EHR-integrated billing tools for therapists.

Do payments need to be HIPAA compliant?

Yes. Any payment that involves Protected Health Information (PHI)—such as client names, diagnoses, or treatment details—must use HIPAA-compliant payment processing. This ensures data security, PCI DSS and HIPAA compliance, and legal protection for therapists. Using secure payment processing for healthcare also helps maintain client trust and prevent costly breaches.

Why Do Mental Healthcare Providers Need HIPAA-Compliant Payment Processing Methods?

Mental health professionals handle sensitive Protected Health Information (PHI), which is covered under federal privacy laws. Using HIPAA compliant payment processors ensures that client billing, invoices, and transactions are protected by strict data security measures. These systems—such as HIPAA compliant billing software and secure payment processing for therapists—safeguard client confidentiality while maintaining regulatory compliance.

What Type of Transactions Require HIPAA-Compliant Payment Processing?

Any transaction that involves PHI requires a HIPAA compliant payment gateway. This includes online payments for therapy sessions, EHR integrated payment systems, and mental health billing and payment tools that process client names, diagnoses, or treatment details. Secure platforms ensure both payment and health data are encrypted and protected under HIPAA and PCI DSS standards.

How Does a Business Associate Agreement (BAA) Relate to HIPAA-Compliant Payment Processing?

A Business Associate Agreement (BAA) is a legal contract between a therapist and a payment processor. It ensures the provider of BAA payment processing solutions adheres to HIPAA requirements when managing PHI. Always confirm that your payment platform is willing to sign a BAA—this is essential for compliance and accountability.

What Happens If I Use a Non-HIPAA Compliant System?

Using non-compliant tools like standard PayPal or Stripe accounts puts your practice at risk of data breaches, HIPAA violations, and financial penalties. Non-compliant systems lack proper data encryption in healthcare payments and often fail to meet PCI DSS and HIPAA compliance requirements, leaving sensitive client data exposed and your professional reputation vulnerable.

Is PayPal or Stripe HIPAA-Compliant by Default?

No. Neither PayPal nor Stripe is HIPAA-compliant by default, as they do not sign BAAs with healthcare or mental health providers. For secure alternatives, look for therapist payment processing solutions or HIPAA compliant credit card processing platforms that explicitly support healthcare data privacy and compliance.

How Can I Ensure a Payment Processor Is HIPAA-Compliant?

To verify a processor’s compliance, confirm that it offers a signed Business Associate Agreement (BAA), employs data encryption in healthcare payments, and enforces multi-factor authentication and access controls. The best HIPAA compliant payment methods in 2025—such as Rectangle Health, Ivy Pay, and Stax—provide HIPAA compliant invoicing software with strong encryption, role-based permissions, and routine compliance audits.

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