Payment Processing For Nutraceutical Ecommerce
Having a difficult time finding a Payment Processor for your online nutraceuticals business? Don’t take it personally. Even if you have an outstanding financial history you may still struggle to find a payment processor who is willing to work with you – and who won’t charge you outrageously high fees.
Why is this so difficult? In part, because nutraceuticals is a high-risk industry and that translates into an automatic “no” from many financial service providers. Or you may get an intial yes, and then – as has been the case with some ecommerce platforms – you are suddenly notified that the company will no longer process credit cards for your business. You suddenly either need to find a Payment Processor who will work with you, and whose services work with your existing online store– or go out of business.
And frankly, some payment processors are taking advantage of the situation. They know your options are limited, so they crank up the fees and hold onto as much of your money as they can, for as long as they can. Beware of Payment Processors who want to take advantage of your desperation.
But why are nutraceuticals high risk?
Any industry that typically has a higher-than-normal rate of chargebacks is considered high risk by financial service companies. Chargebacks – when a customer disputes a charge on his or her payment or debit card – require banks and other financial service providers to spend time, money and effort sorting out and solving the problem. So some fincial services companies simply have a policy of not doing business with businesses in industries that have been determined to be high-risk.
Many industries are considered to be high-risk, including some that might not seem particularly prone to chargebacks such as travel, online gaming, and collection agencies. Some, if not many, of these chargebacks are due to buyers rethinking their purchase or transaction. Others come from dissatisfied customers who aren’t happy with the product they received, or weren’t clear about the terms of their purchase.
Nutraceuticals have been badly affected by a few problematic merchants who engaged in deceptive billing practices – or simply didn’t communicate clearly with their customers – which led to a high rate of chargebacks. Due to the actions of a few, the entire industry has been labeled high-risk.
How can I reduce risk for my nutraceuticals business?
The most effective way to reduce the risk of chargebacks and payment card fraud is by clearly communicating with your customers, and backing that up with the right technological solutions.
You need to ensure that you have clearly and accurately described your products on your ecommerce website. You also need to make sure that your billing and refund policy are explained in full, and are understandable. Let your customers know how the charge will appear on their payment card’s statement if you bill under a different business name than they might expect. If you offer subscriptions or auto-renewals, make sure to explain these reoccurring charges. Resist any temptation to “hide” billing, refund and subscription information in tiny type, tucked away discreetly on your ecommerce site. It’s better to potentially lose a few sales than get hit with a multitude of chargebacks.
Then, maintain good business practices. Deliver products as promised, on time. Make sure to respond to customer questions and problems as quickly as possible. Usually customers only institute chargebacks when they feel that the merchant is unwilling to resolve an issue any other way.
You’ll also want to reinforce your efforts with technology that actively monitors transactions in order to reduce the risks of fraud, chargebacks and other issues. Your Payments Processor should be able to provide you with the right solutions.
Don’t settle for less than optimum service just because your business is classified as high-risk. Instead look for a Payment Processor, such as T1 Payments, who specializes in delivering solutions for nutraceuticals and other high-risk businesses.
You want a Payments Processor that offers:
High-risk focused underwriting: This is the vetting procedure financial services firms use to determine a merchant’s risk level. Look for a Payments Processor who specifically works with high-risk accounts as their underwriting process will be better able to determine your nutraceuticals’ real business risks and potentials.
Fast onboarding: you probably don’t want to wait for weeks to hear whether your application has been accepted by a Payment Processor. Look for one that offers quick authorization. For example, T1 Payments can have you up and accepting payments in 24-48 business hours.
Fraud protection: online payments are inherently riskier no matter what type of goods or services you sell. In store, ID can be checked and consumers will probably use a chip-enabled payment card. Online sales offer none of these protections. Thankfully, there are fraud protection solutions specifically designed for ecommerce which utilize “fraud scrubbing” filtering to spot and screen suspicious transactions.
Chargeback reduction: Tech solutions can’t prevent all chargebacks, but can significantly reduce them by monitoring for transaction errors, fraudulent patterns, and other issues that often result in chargebacks.
Complete solutions: Since high-risk businesses absolutely do require advanced services aimed at minimizing the business’ potential exposure to chargebacks and fraud, your Payment Processor should provide access to a comprehensive service offering so you don’t have to piece together a solution and can make one flat monthly payment. You should be able to access your account data securely online, and ideally without having to purchase additional software.
Flat Fee Merchant Account: A flat fee account means that you are charged a pre-set flat monthly fee and a flat per-transaction fee instead of a percentage of your monthly sales volume. This allows you to predict your monthly accounts payables and profitably increase your sales.
PCI Compliance: Any financial service provider who handles payment card data must be fully in compliance with “The Payment Card Industry Data Security Standard” (PCI DSS, commonly called PCI). Your Payment Processor and Payment gateway should be certified as a PCI Level 1 Service Provider.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services that integrate with over 175 different shopping carts. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.