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Online Pharmacies: How to get a high-risk merchant account?

There is no doubt that the online pharmaceutical industry is extremely lucrative for business owners due to the massive demand of medicines all over the world. In fact, the revenue for the global online pharmacy segment is projected to reach US$22.59bn in 2022.

Although an online pharmacy business may be tempting to get into, getting a merchant account for your online pharmacy might be difficult, or even an ordeal.

Online pharmacies are considered high-risk businesses by traditional banks. Let us elaborate on this further!

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Challenges and setbacks to consider when trying to get a merchant account for an online pharmacy

While an online pharmacy can be extremely profitable, there are also some challenges and issues to consider. If these concerns are not addressed properly, they may turn into bigger problems.

The most commonly witnessed problems with online pharmacies are given below:

  • The chargeback ratio is very high
  • Verifications can be problematic
  • Some competitors sell without licenses

There are many chargebacks in this industry. One reason for this that the customer is not actually charged at the time of ordering a medicine or drug although the payment is authorized. A registered doctor needs to review and approve the purchase. The amount is only charged once a competent doctor has reviewed and approved the purchased drug. Hence, the customer may forget about the transaction due to the time lag between making the payment and its actual deduction from the bank account or credit card balance. This time-consuming process of verification is also frustrating for customers. This is just one of the many screening protocols and regulations that define the online industry.

An important reason for such strict rules and regulations is that a lot of online pharmacies are operating without licenses. Licensed pharmacies are accredited by the relevant regulatory and medical bodies. They ensure there are standard checks in place so that only medicines prescribed by qualified doctors are given to customers, and also no unauthorized person gets hold of these drugs.

Some unlicensed pharmacies may not necessarily be illegal; such pharmacies sell drugs that do not require a prescription from a doctor. These include over the counter medicines, CBD and weight loss supplements. Such pharmacies are always classified as high-risk. If a licensed pharmacy sells such products as well they would still be considered a high-risk business.

Why is it important to get a high-risk merchant account for an online pharmacy?

There are numerous benefits of getting a high-risk merchant account for an online pharmacy. Let’s discuss these one by one.


The first one is related to the security aspect of the purchasing process. You are also going to deal with less stress and difficulties if you are working with a reliable and experienced high risk merchant service provider. A reputable service provider will take all necessary steps to make your transactions extremely secure.

Security measures and fraud detection checks ensure that a wireless transaction is processed without compromising the customer’s information. Measures like PCI Compliance, Data Encryption, payment tokenization, 3D Secure Implementation, Card Verification Value (CVV) and Strong Customer Authentication (SCA) make online transactions completely secure and safeguarded from fraud or other security threats.

Tracking Payments

Latest state-of-the-art payment systems make payment tracking extremely feasible. You will be able to see which stage a transaction is at: from point of sales and checkout all through payment approval and transfer. All these points of sales systems and merchant service processing tools come with cutting edge functionality which makes tracking of all transactions a piece of cake- be it online, contactless, card or even e-cheques.

Multiple Payment Options

You are also dealing with better payment options such as Apple Pay, Google Pay and other contactless options like debit card, credit card and even e-cheques. This will lead to a higher volume of purchases without overloading your system. This adds to the credibility of your online pharmacy business.

What to consider when you look for a merchant account provider?

A merchant account for online pharmacy needs to comply with various legal and medical regulations. This is going to be crucial for the success of your business.

A good merchant account provider is going to be aware of all the pitfalls and issues related to the industry. They are going to ensure that they stay one-step ahead of the possible issues and challenges involved.

It is also a good idea to ensure that you are going to be working with a provider that understands the value of quality customer service. They should have a team of experts that specialize in dealing with online pharmacies. Support like a helpline number and chat support should be available. All these factors will make a substantial difference in the services you obtain.

Let CutPay help you!

We at CutPay understand the needs and requirements of online pharmacies. We hope these tips from us help you in running your business.

If you want to apply for a merchant account for an online pharmacy, you have come to the right place.

Just fill out the form below and give us some details about your business and one of our representatives will reach out to you shortly!

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