The business model of nutraceutical businesses is the reason why online credit card processing is quite difficult for nutraceutical merchants. Most banks consider it high risk due to continuity billing and high chargebacks. There are only a few reliable and affordable nutraceutical merchant account options. Such companies offer you guidance and expert advice throughout the process. Their managers would help you increase profits, prevent fraud, and reduce chargebacks. Some of the best nutraceutical merchant account providers are:
- Global Pay LTD
- Allied Payments INC
- POS Barn
You certainly need reliable credit card processing at a reasonable cost if you are starting or running an ecommerce nutraceutical website. Due to many reasons, nutraceutical businesses have limited options for credit card processing. The regulatory environment is still evolving and not many payment processors and banks are into this industry. Therefore, new nutraceutical companies find it very difficult to find high risk processors that offer competitive rates as well. The nutraceutical industry is considered a high-risk industry due to high chargeback rates, US regulations and recurring billing. Many times, the customers do not understand what type of recurring billing they are signing up for. They find out about annual, quarterly or monthly recurring billing after seeing their statement, and then they initiate a chargeback.
A reason for chargebacks in the nutraceutical business is that customers are not happy with the results or products. It is why the nutraceutical industry is categorized as a high-risk business within the ecommerce industry. Very few credit card processors are willing to provide merchant accounts for this sector. Companies who offer nutraceutical merchant accounts work with various gateway providers and processors to provide both domestic and offshore accounts. Requirements for nutraceutical merchant accounts and credit card processing differ for domestic and offshore accounts.
The requirements for domestic nutraceutical merchant accounts are:
- The entity should belong to a US based company.
- Have a US representative of the company.
- Account in a US bank.
- The business can offer both recurring billing and shopping cart sales.
The requirements for Offshore nutraceutical merchant accounts are:
- Offshore representative.
- The company can be based anywhere in the world.
- The minimum sales per month must be $50,000.
Nutraceutical merchant account providers offer credit card processing to different types of businesses. It includes businesses which provide products for weight loss, anti-aging, workout supplements, blood sugar balance, vitamins, mood enhancement, dietary supplements, stress management, herbal products, libido boosters, botanicals, sexual enhancement, fat burners, skin care products, immune health, and nutritional beverages.
The types of businesses that receive credit card processing by nutraceutical merchant account providers are:
- Domestic and Offshore
- $0 minimum processing for domestic accounts and $50,000 minimum processing for offshore accounts
- Merchants that are included in the match list or TMF
- Bad credit or high chargeback merchants
- Previously dropped or rejected by other processors
- Existing businesses
- Startup businesses
You can get a nutraceutical merchant account by directly talking to the Merchant Account Manager of the company or by simply clicking the “Apply Now” button on the provider’s website. If you want to open an offshore nutraceutical merchant account, the provider will ask you for information like payment processing statements, chargebacks, total sales, returns, and refunds. You will need to provide business banking statements from the last three months, and the approval could take up to 2 weeks. In case you do not have business banking statements, your personal banking statement will be required.
The application process for domestic nutraceutical merchant accounts is a little different. You will need to provide valid ID, voided check or business bank letter, documents of incorporation, and business banking statement for the last three months. The statements must clearly show the total sales, returns, refunds, chargebacks, and company name. The time for approval can vary from five business days up to two weeks. However, the application is approved within five business days in most cases.
Before you open a nutraceutical merchant account, it is highly recommended that you get familiar with different types of fees for credit card processing. The fees depend on factors like projected sales volume, industry type, and processing history of the merchant. Following are the different types of fees charged for nutraceutical merchant accounts:
- Transaction fee
- Merchant account setup fee
- Refund fee
- Chargeback fee
- Monthly statement fee
- Merchant account registration fee
- Discount fee
It is difficult to find a merchant account for nutraceutical business due to the health regulations of the US Government. Although it is a thriving category of ecommerce industry, the companies are still considered high risk. Banks will try to avoid you if you are starting a nutraceutical business due to it being an unregulated market and posing a risk for legal action. It is a problem that business owners and startups are facing, and only a limited number of providers are offering credit card processing for this industry.