Natural products and supplements are a popular trend in the health & wellness industry. Many celebrities as well as web influencers endorse such products frequently through digital platforms.
Nutraceutical is a broad umbrella term generally defined as food or a product derived from food source that gives extra nutritional benefits in the diet. It also has medicinal benefits that help in treating or prevention of disease.
Alternative medicine & food has become necessity in the modern world. Global nutraceuticals market size is expected to reach $302,306 million by 2022 making it one of the fastest growing industries.
With online channel being the top outlet for sale of nutraceuticals, merchants are obliged to offer credit card and alternative payment options to sustain their business. But obtaining a merchant account for nutraceutical business is an uphill task due to its risky nature.
The nutraceutical industry has been categorized under High Risk by traditional banks and credit card processors making the process of getting a merchant account extremely difficult.
- Nutraceutical products are highly vulnerable to severe chargebacks. The industry has a higher than average chargeback ratio. This is due to several reasons,
-Subscription based business model: With such business models, customers are charged a one-time subscription fees and monthly charges. With such products, customers expect quick results and if the product does not deliver, dissatisfied customers then demand a refund or cut-off the subscription.
-In some cases, customers subscribe for a service on a free-trial but businesses continue to charge after the trial period ends due to auto-renewal. Unaware customers then ask for refunds.
-Some subscription-based businesses engage in friendly fraud with absent or deliberately hidden fine print. E.g. Companies make customers sign-up for a one-time fee but later continue to charge customers without their knowledge. Such business practices not only increase chargeback risks but also cause legal trouble giving a bad reputation to the entire industry and making credit card processors cautious.
-The unclear legal status of some of the products sold can result in an influx of high amount of chargeback which is bad news for the merchant account provider.
- Like with niche businesses, most banks and credit card processing companies are unfamiliar with the workings of nutraceutical industry and do not want to take a chance.
- Reviewing businesses in order to make sure they are in compliance to the rules requires processors to be extra cautious and diligent because of the unclear regulatory status of some of the products.
Secure a Nutraceutical and Supplement Merchant Account
In order to have a flexible and efficient payment structure, a Merchant Account has become a necessity no matter the type of business you operate.
In the case of a merchant operating nutraceutical related business, it becomes even more essential to obtain a merchant account as it deems the business legitimate and trustworthy to customers. But with the many obstacles faced by businesses, finding a fitting merchant account provider should be a difficult task.
But not anymore! Look for merchant account providers offering customized solutions for nutraceutical and supplement industry.
There are plenty reputable processors in the market that provide High Risk merchant account solutions for the nutraceutical industry. As merchants, research and study the services offered, chargeback prevention tools and measures available and the fee structure of a potential merchant account provider.
The nutraceutical merchant account is available for multiple related businesses, to name a few;
- Minerals, vitamins and other dietary supplements
- Herbal products
- Function Foods
- Herbs or other Botanicals
- Beauty and cosmetic products
- Food additives
Instabill, International Bank Services (IBS), Quadrapay, Leap payments are a few popular High Risk Merchant account processors offering Nutraceutical and Supplement Merchant Account Solutions.