HIGH RISK MERCHANT ACCOUNT SPECIALISTS

21 Feb

By Aditya Williams

Category: Dedicated Merchant Accounts, merchant account for online pharmacy, merchant account for pharmacy, merchant account providers for online pharmacy

Why are pharmaceuticals and nutraceuticals high risk by banks? Comments Off

Why are pharmaceuticals and nutraceuticals high risk by banks?

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.


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?

As our world progresses towards digitalization, more and more people find the online purchase of any product to be the best way to purchase. Same happens with an online pharmaceutical company as well. There are many people who don’t like to go outside to purchase medicines too. That’s when online pharmacy offshore merchant account comes into the picture.

  • 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

  • No matter what kind of pharmaceutical company you are running the main agenda behind running such a business is to generate more and more revenue which is only possible when you avoid chargebacks. This can cripple any industry. There are so many medicines available online which are for health and well-being but fails to deliver the effect or doesn’t look like what the advertisement said then the customer often files for a chargeback. The chargeback ratio should be below 2% if not, then the merchant account for online pharmacy will receive potential threats.

    The solution for this is to avoid making unrealistic claims. Always be honest about what you are selling. Don’t just mention the benefits, if a medicine has a side-effect, always mention it too. You should be considered as a reliable company and that is only possible when you are honest about your products. Everyone knows that all medicines come with some kind of side-effect. Hence, mention it. Even drinking too much water can cause bloating, people know the truth.

  • People often buy medicines seeing free subscription ad, everyone will like to try a new thing first before becoming a regular consumer. If your site is also promoting it and if someone purchases it and later discovers that you have taken out money from their account without letting them know, then they will file a chargeback. This is pretty common, in fact, this happens to television channel subscriptions too.

    The solution for this is to create a transparent pharmacy payment processing. Don’t take money out of anyone’s account directly. Set a reminder, email them or call them, letting them know that the free subscription period is about to get over and if they don’t cancel it now, money will be deducted. The more honest you are the safer and wanted your customer will feel.

  • Credit card frauds are not uncommon at all. Since yours is a merchant account online pharmacy ensure that you have a safe pharmacy merchant account payment gateway India or for any other country. The customer might not even know that something has happened and the amount got deducted, they might not even realize buying something from you and may file for a chargeback.

    The solution for this is to create a safe and reliable payment processing online pharmacy. Make sure that your site is PCI DSS compliant to avoid unfortunate chargebacks. If you have a proper payment gateway for online pharmacy account, then your website will remain secure and safe from cyber-crime.

Problem 2: Inefficient customer service support

All it takes to build a good reputation for your merchant account online pharmacy is to have a good backbone and that is only possible when you have a reliable customer service support. A customer will call you only when needed, a pleasant and empathetic voice is what the person calling wants to speak to. No matter how powerful the pharmacy payment processing is if you don’t have solid customer support, no one will like to invest in your business.


The solution for this is pretty simple along with applying for a licensed wholesale pharmacy merchant account service invest on the customer support department too.

Problem 3: Offshore merchant account for pharmacy is closed!

The main reason for any online pharmacy merchant account for a startup to get closed or rejected is because of banks who often wary to invest their time and effort on online pharmacies, especially the new ones.


Many times it has been noticed that online pharmacies don’t follow the rules and regulations set by the FDA and get into selling illegal substances in the name of nutraceutical and nootropics supplements. This is the reason why almost 1100 offshore merchant account for pharmacy have already been closed.


The best solution to avoid such dire consequences is to get in touch with some reliable merchant account providers for an online pharmacy, be honest with them and about your products. Stay legal to avoid legal consequences on the pharmacy payment gateway. The last thing that you will wish to happen is shutting down your own business.

Few last words

Communication and transparency is the key. Be honest with the online pharmacy merchant service provider. To have a running online pharmacy payment processing you need to be honest about your business model and plan and also ensure that you are sticking with the guidelines. Keep all your financial statements with you when asked because to create a safe payment gateway for pharmacy you will have to show your credit history for inspection.


Another way to get your pharmacy credit card processing account approved is to speak to as many online pharmacy/ vitamins/ nutraceuticals merchant account services as possible. Don’t settle down to just one.


If you are looking for pharmacy merchant accounts then be stable with your high-risk business. Growth is needed but stability is equally important.


W ork with a service provider who has worked with your service industry before. This way you will know that the service provider you are dealing with is reliable and knows everything about creating an online merchant account.

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