If you are thinking about starting an e-commerce business for pharmaceutical and nutraceutical companies, then we are sure you must have faced a lot of challenges. Although the pharmaceutical industry is growing day by day, the owner still faces a lot of hurdle in running the business smoothly. Almost every bank considers this business to be high-risk and that’s when the problem arises.
The best way to avoid banks and to have a smooth operation for any pharmaceutical company is to have a merchant account for pharmacy. This way you are assured that your payment will be taken care of and you won’t find any difficulties. Almost 1100 online pharmaceutical companies are marked as illegal for one or other reasons. One of the most common reasons being not adhering to FDA guidelines. You must follow your local Government rules and policies along with FDA rules strictly to be able to run a smooth pharmacy merchant account. They have strict policies like for example, you can’t sell any controlled drugs in any condition. Chargeback should always be below 2%. These are the main reasons why pharmacy merchant accounts are not getting approved or getting rejected again and again.
Merchants who sells Pharmaceuticals and nutraceuticals are operating a high-risk business, and their credit card processing is also tagged under this high risk label, and this will force you to face a lot of challenges. In spite of the pharmaceutical industry has increased more and more in the last few years, business owners are still dealing with a lot of troubles to running the business in a soft way, this struggle is due to the tag of high risk that banks gives to this business category.
Pharmaceuticals and nutraceuticals, have restrictions and government regulations which are the primary factors affecting their credit card processing, and this causes that this business are classified as high-risk. If people used the wrong medication this could cause them negative effects or repercussions and may harm their bodies, damaging their health. And moreover, if a country is having a drug crisis, this is a consequence of the government and medical businesses did efforts to avoid illegal or unauthorized access to prescription drugs. All this factors makes the Pharmaceutical and Nutraceutical industries are tagged as high-risk businesses, there are more than 1000 online pharmaceutical companies marked as illegal for different reasons.
How can this industry sector avoid the banks restrictions and operates in a normal way? It is not as simple as it seems, because Pharmacy industry face so many challenges every day, such as legal, regulatory and technology-related, but there are so many providers that offers merchant accounts for pharmacy industry, and this will help you to deal with all the difficulties that pharmacy payment process brings itself. It is recommended that merchants follows their local Government policies and rules to facilitate them their pharmacy merchant transactions, considering that chargebacks must be under the 2%, but this percentage it is not respected merchant accounts are not getting approved with more frequency.
Ii is hard to worrying about how to accept payments in the pharmacy sector or the ins and outs of small business credit card processing. At iPayTotal we know that your main priority is to solve the needs of your customers, to do this you need to accomplish it with the main keys, which is offer them a seamless, outstanding, hassle-free customer service so their experience it will be the best when they make a purchase. We’ll help you to provide your clients and customers with fast card authorizations, and a wide spectrum of payment options so they can accept the most quantity of credit and debit cards, in this sense, the label high risk for your business won’t be an obstacle to receive a Merchant Account and have a reliable and secure credit/debit card processing minimizing the susceptibility of chargebacks inherent to the pharmaceutical industry sector.
There are a lot of reasons why banks are not inclined to work with a high-risk merchant account pharmacy. It attracts a lot of reputation and credit risks. The main reason being the product “medicines” itself. Everyone knows that medicines can have a very high impact on someone’s life. It can affect the person mentally as well as physically. That’s the reason why the FDA has added a lot of restrictions. One of them being controlled drugs, FDA and the Government doesn’t allow any pharmaceutical company to sell controlled drugs. It is against the law if your company is caught selling them then be rest assured that the online pharmacy account will be shut down. Be assertive and follow the norms strictly.
What is the difference between Nutraceutical, Nootropics, and Dietary Supplement?
Supplements in general means capsules, pills, powders, and even tablets which are composed of chemicals along with food nutrients which are produced to enhance the consumer’s health.
Online pharmacy who sells these supplements is not considered to be high-risk processing pharmacy. Medically prescribed drugs which are regulated by the Government, FDA, as well as Food and Drug Administration, are different from supplements. You will find supplements being sold by a lot of local grocery shops too. That’s why they are considered to be safe. To explain it further, please read the following points:
Nutraceuticals are the supplements which are made from food items, these pills are then consumed by the consumer to boost their overall health functions. They can also be labeled as a subgroup of dietary supplement, but you will often see them with a label “all natural” that’s why taking these supplements don’t cause any problem to health.
Nootropics, on the other hand, are the supplements which you take for the benefit of cognitive acuity as well as enhancing mental health. These are labelled as smart drugs. Now, nootropics are a new member of the high-risk merchant account for online pharmacy and since they are consumed mostly by young people to enhance their cognitive ability they endure a lot of scrutiny by the banks. They also receive a lot of chargebacks because of which banks refrain from participating in these kinds of business.
Understanding the risks which are involved in high-risk merchant account online pharmacy
Every nutraceutical and pharmaceutical company wants to flourish and they generate the greater part of their revenues through E-commerce platform and online sale. And hence, they are always looking for online pharmacy credit card processing, to give a chance to their consumers to buy the medicines through credit card payment gateway. But nutraceuticals include pharmaceutical preparation to create each and every composition. This business as well has to follow certain guidelines and they, unfortunately, receive a lot of chargebacks as well making it impossible for the banks to rely on them. Because of their products, it becomes necessary for any nutraceutical company to provide consumer satisfaction and that’s why it becomes mandatory for them to have an online pharmacy merchant accounts. They must always get in touch with online pharmacy merchant account services to create a merchant account without any fail.
To create a Nutraceutical high-risk pharmacy merchant account with MID with is the Merchant identification number, TID which is the terminal identification number and a GID which is gateway identification number. Every medicinal company should have a safe high-risk payment gateway for pharmacy.
The MID that will be provided to your company is a unique identification number which is given to pharmacy offshore merchant account. Then for the second step, you need to have a TID number and it will be given to you by high-risk merchant account online pharmacy provider. The last step is to have a pharmacy merchant account payment gateway for the end-to-end and seamless transaction for the payments. You will also need to have GID to receive payments, this will include chargebacks, cancellation of a product and refunds.
What is the status of pharmaceuticals and nutraceuticals industry today?
Pharmaceuticals and nutraceuticals are tagged under the to high-risk credit card processing classifications, due to several factors, like government restrictions and regulations. Use this medication in a non-right causes bad situations and this causes a lot of chargebacks, this is the main reason for which this business are high risk. Think about this products should forces you to look for high-risk processors that helps you out to sell them in a good and reliable way.
Asian countries are rapidly growing and hence there is a huge scope for a merchant account for online pharmacy Countries like India, China, Japan, Taiwan, and more are growing at a faster pace and hence they are interested in growing their E-commerce platforms too.
There are a lot of people around the world who believes in self-treatment and don’t really visit clinics and hospitals for a certain ailment, online pharmacy merchant accounts in the US usually target these people.
Almost everyone now is willing to work on their mental growth and physical health which creates a huge scope for an offshore pharmacy merchant account.
Having said that there are a few challenges which are face by nutriceutical and pharmaceutical companies, let’s check the potential challenges:
Problem 1: Heavy chargeback
Due to the regulations over pharmaceutical and nutraceutical products, banks and financial institutions do a lot of scrutiny over this industry sector, because of the lot of chargebacks which merchants have during their sells of this product. The FDA makes the online pharmacy business to research until know who bought the product, and contact to the patients’ doctors to figure out about a refund for recalled drugs, this is not mandatory but so many businesses do it because of their clients satisfaction, but some business decide to give refunds for recalled medicines. This could have two consequences: The first one is the client doesn’t complaint about the issue and second one is the client makes anger and decide to ask a refund through chargebacks. And this second one is the most common which happens. The result is due to the very high volume of sales, the amount of chargebacks is really high. And for this reason, pharmaceutical companies’ need a reliable high-risk merchant account, but the danger for the merchants is the bank can cut them off if the level of chargebacks is really high.
A possible solution could be avoided with honesty claims which are unrealistic, and give a detailed description to the clients about the products which you are selling, not just tell them about the benefits, make a real effort in a very good advertisement, so this way you can decrease the chargeback ratio below 2% to avoid potential threats.
Problem 2: Inefficient customer service support
It is not easy to build a good reputation as a merchant, but for online pharmacy business it is possible to have reliable customer support applying the best technology through the more efficient equipment. You should offer to your clients the best services for high risk online and e-commerce merchants such as helpdesk center with empathetic and exclusive dedication people to attend and solve their problems. Moreover, you need to count with a steady backbone which helps you to solve high risk credit card processing needs according to specific clients’ profiles because each client can have different problems with regard to their profiles and configurations.
It is highly recommended to treat the pharmacy business like a service industry like online pharmaceutical sales so this way Internet merchants categorized as high risk can access to a secure payment via credit card methods. Merchants need to have in mind that it is mandatory to invest in the customer support department of their businesses. At iPayTotal we know that each merchant has different needs and for this reason we dedicate a lot of time to know how it works your business and give you processing credit cards in a fast way. If you are looking for a reliable, trustworthy, efficient and fast high risk merchant account to be the backrest and support of your online pharmaceutical business you can call us or email us, we at iPayTotal are ready to give you the best services option fixed to your needs.
Problem 3: Offshore merchant account for pharmacy is closed!
Banks are usually cautious to invest in scrutiny the online pharmacy businesses, mostly if they are recent. The reason is that, for this business category, merchant accounts are closed or rejected if the business is a startup. It is known that online pharmacy business don’t follow the regulations and rules set by the FDA because its approval is helpful but not mandatory required, and, moreover, it’s vital that business owners are upfront with the processor about the products which they sell, because they need to know about banned ingredients and even knowing them, they can still be declined, being the main reason why more than 1000 offshore online pharmacy merchant accounts have been closed last year.
The best solution for you to avoid these problems is to get in touch with us, we at iPayTotal are reliable merchant account providers for the online pharmacy business, and we help you to sell your products with honesty and transparency, taking care of every single legal detail so that way you won’t suffer any consequences related to the pharmacy payment gateway.
Few last words
To be successful in the online pharmacy industry, you have to apply the main key which is honesty and transparency. With these two elements you will run your online pharmacy business in a soft way, because you will give the final classification of your products and with good advertisements you will can give reliable information to your clients and in consequence, you can avoid the chargebacks and fees along with them. So, remember, communication, honesty and transparency applied with the guidelines to ensure the financial statements of your payment gateway and minimize the risk inherent to the online pharmacy business. Another recommendation is to seek the most amount of online pharmacy/vitamins/nutraceuticals merchant account services providers, this way you will be able to choose from a wide spectrum of different options, and get one which could offer you stability and fast growth.