Setting up an Online Pharmacy Merchant Account – What You Need to Know
by Confidential Banking #1 Merchant Processing ServicesWith
everything going digital these days, it’s no surprise that online pharmacies
are becoming increasingly popular as well. In fact, according to Statista, the
global online pharmacy market is likely to reach $128 Billion by the year 2023!
Are you planning on tapping into that huge market and setting up your own
online pharmacy business? You should know… to be able to accept credit card
payments from your online customers, you’re going to need a merchant account.
But if
you’re thinking, “Hey, it can’t be this easy,” you would be absolutely right!
Although
many online pharmacies are highly reputed and well known, the views of
financial Institutions are negative for the industry in general. The online
pharmacy industry is considered “high risk” in nature by most banks and credit
card issuers, which makes it tough for any pharmacist to get a merchant
account.
There are
many reasons why online pharmacies are labeled as high risk. One of those is
the product itself. Government authorities have strict and stringent policies
in place regarding the sale/purchase of controlled medicines and substances,
which is why most financial institutions are reluctant to set up a merchant
account for online pharmacies. The second reason is the high chargeback to
sales ratio. If the customer isn't satisfied with the product, they file a
chargeback, putting both the merchant and acquirer in a loss. Financial
institutions understand this all too well – and that's why most of them do not
offer processing services to pharmacies.
So how do you accept payments online for your pharmacy business?
When it
comes to setting up a pharmacy
merchant account, you can rely on a fund transfer service
called e-check or ACH (Automated Clearing House). Using the ACH network, you
can easily and securely check payments from your online pharmacy website. All
your customers have to do is enter their transit, routing and account number
off their checks, and the funds will then be debited directly to your business
holding account. Fund can even be wire to an overseas account weekly.
Application Process for Startup Online
Pharmacy Check
To get an
e-check/ACH merchant account, you’ll need to apply with a third party high risk
e-check processing services provider that's fine with
on-boarding high-risk merchants such as yours. The processing company will
evaluate your application and request some documents from your end. In the
payment processing industry, these documents are known as KYC (or Know Your
Customer) documents, and may include the following:
·
A signed ACH
application
·
Faxed or
scanned copy of incorporation paper
·
Scanned copy
of owner’s passport
·
3 months of
bank or credit card statements
·
Void check
or signed wire instructions for overseas accounts
·
Fully
functional US customer service number
·
CIPA members
are very welcome for ACH processors.
After
rigorously evaluating your KYC documents and the nature of medicines or other
products you sell, the processing company will approve your merchant account.
Keep in mind that you cannot sell controlled medicines or substances even with
an e-check or ACH processing account.
Final Notes
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Created on Mar 6th 2020 04:27. Viewed 592 times.