The proliferation of online shopping has significantly propelled the growth of the online pharmaceutical industry. This expansion is further fueled by the high costs associated with numerous consumer drugs. The demand for online pharmacy merchant accounts has experienced a notable upsurge in recent years, and there are no indications of a slowdown in the industry’s momentum.
Numerous pharmacy operators encounter challenges in securing reliable and affordable merchant account services. The limited options available, coupled with high rates and fees, create hurdles for merchants in their quest for sustainable solutions. An increasingly popular and cost-effective alternative has been the adoption of e-check processing services for pharmacy transactions.
While some merchants have opted for credit card processing services for pharmacy transactions, the inherent instability of such payment processing services has led to the closure of many pharmaceutical businesses. The difficulty in securing dependable merchant services has led some to believe that obtaining pharmacy merchant accounts is an almost insurmountable task.
PHARMACY MERCHANT ACCOUNTS TABLE OF CONTENTS
What are Online Pharmacy Merchant Account Services?
For online pharmacies, the need for financial services to facilitate payments is crucial. With the rising trend in online purchases, there is a growing demand for merchant accounts. Most online transactions involve payment cards, such as credit or debit cards, and the necessity for e-commerce and merchant account services is anticipated to continue its upward trajectory.
Establishing reliable and affordable merchant services poses a challenge for many pharmacies due to various terms, conditions, and restrictions imposed by banks, payment processors, and the payment card industry. Stringent government regulations on online pharmaceuticals have rendered it nearly impossible to find suitable merchant accounts. Consequently, many in the industry have turned to more dependable solutions, such as e-check payment processing services.
A prevalent method for online pharmacies to set up merchant services is through aggregated merchant accounts, with systems like Stripe allowing businesses to pool their payments discreetly. While this approach may be costlier and slower in payouts, it remains a viable option for some businesses.
How Does Pharmacy Credit Card Processing Work?
Credit card transactions, whether conducted online or through a terminal, follow a similar process. Customer information is transmitted using standard protocols and security measures.
The payment card network, encompassing Visa, MasterCard, Discover, and American Express, plays a pivotal role in transactions, connecting the merchant’s bank and the customer’s card-issuing bank while upholding security and technology standards.
Payment processors manage technical support and account management for merchants, receiving payment authorizations and forwarding requests to the customer’s bank.
The acquiring bank, often doubling as the payment processor, maintains a direct relationship with the payment card network, assuming liability for approved merchants and ensuring PCI compliance and security.
The customer’s bank, or card-issuing bank, oversees the customer’s credit or debit card accounts, conducting security and financial checks on each transaction.
The terminal, whether a payment gateway, virtual terminal, or physical terminal, collects customer information and transmits it to the payment processor. It must be PCI compliant to prevent losses.
The authorization process begins with the merchant, passes through the processor and acquirer to the payment card network, and then reaches the card issuer for approval. This process facilitates online pharmacy merchants in accepting global payments.
Online Pharmacy Merchant Fees for Payments
Online pharmacy businesses, categorized as higher-risk merchants, contend with elevated costs for merchant accounts. Three primary billing methods—tiered, flat-fee, or interchange pricing—are available, with interchange pricing often considered the fairest, allowing pharmacies to benefit from varying card pricing.
Pharmacies must pay close attention to their banking agreements to avoid excessive payment solution costs and select a fee structure aligning with their needs.
Risk Concerns Faced by a Pharmacy Merchant
Online pharmacies grapple with challenges such as chargebacks, violations, and TMFs (Terminated Merchant Files). Merchants with problematic histories may encounter difficulties obtaining approved merchant accounts. Excessive chargebacks can signal misleading or fraudulent payment acceptance, and violations of guidelines or selling controlled substances may impede the ability to secure a payment processor. Being listed on a TMF makes it challenging to partner with payment processors.
Despite these challenges, many payment processors are willing to collaborate with online pharmacies that adhere to all rules and regulations.
Start Accepting Pharmacy Payments Today!
Online pharmacy merchants can reach out to our payment processing team for assistance in joining our network. Our professionals are prepared to aid with applications, and our support team is available to address any queries.