Close to 70% of the entire US adult population uses some sort of medication. And because most people enjoy (or even prefer) the convenience of shopping online, it comes as no surprise that lots of pharmacies have migrated their operations online. These days, internet pharmacies as they’re called, aren’t too uncommon.
But despite many of them offering legitimate products, internet pharmacies are considered some of the highest risk merchants out there. And that’s why a lot of merchant service and payment gateway providers refuse to do business with these businesses. On the upside, there are a few that take on the risk to help internet pharmacies expand and accommodate their intended audience.
First things first — what makes an internet pharmacy high risk? Well, it’s all about chargebacks. Anything that increases your chances of getting a chargeback directly affects your risk. Generally, card-not-present transactions are considered high risk versus in-store card-present transactions because it’s easier for fraudsters to fake a purchase with stolen information. But that’s not all there is to it. Other factors can also lead to a merchant being considered ‘high risk.’ These include, but aren’t limited to:
All of these different factors increase the chances of a customer filing for a chargeback. And because most financial institutions incur their own charges when executing chargebacks, businesses that pose a greater risk of these transaction reversals are usually avoided.
So, what makes an internet pharmacy high risk? Unfortunately, the issues for online pharmacies take root in unscrupulous predecessors. While there’s always a risk of people filing for a chargeback after getting supplements or medication that just weren’t what they expected, dishonest internet pharmacies have tainted the reputation for all similar businesses.
When online pharmacies first started becoming popular, there were a lot of opportunistic businesses that jumped on the bandwagon without the intention of providing quality products.
Most of them were actually affiliate marketers that performed dropshipping. That means they never really got to hold the products themselves, and thus they could never be sure of the quality of the medications or supplements they sent to their buyers.
This caused a massive influx of chargeback requests from disgruntled customers, inevitably and permanently affecting the image of online pharmacies for good. That means that even a pharmacy with quality products and ethical performance might struggle to get approval from merchant services and payment gateways because of the reputation set forth by its predecessors.
Anyone running a business that accepts credit and debit card payments — whether on or offline — needs a payment gateway. This is essentially a merchant service that processes card payments for its merchant clients. In a way, you can think of a payment gateway like a cash register. For it to open, it needs to receive the right information. And once it’s opened, it allows the merchant to accept a buyer’s payment.
Payment gateways are different from payment processors in that the gateway is directly involved in the deduction of funds from the buyer’s account and the disbursal of payments in a merchant account. A processor on the other hand is responsible for taking information from the buyer and running it by the banks.
Anyone who wants to accept credit and debit card payments for either a physical or virtual pharmacy needs to have a payment gateway set up. As its name suggests, this ultra-protected and secure system provides benefits for both the buyer and the merchant.
Since pharmacies are considered high risk businesses, it’s tough to find payment gateways that would gladly accept the partnership without imposing exorbitant fees. On the upside, there are still a few viable picks out there that can provide your business payment gateway services without squeezing the life out of your pockets.
Although they’re headquartered in London, UK, PayQ caters to clients both in the UK and the US. The high risk merchant service provider empowers their clients by accepting payments from all over the globe, letting you cater to a wider audience to grow your business and increase your sales.
And while that might raise concerns on safety, their facilities use a 3D-Secure feature that mitigates fraud and thus reduces the risk of chargebacks. But more than just 3D-Secure, PayQ uses what they call 256-SSL encryption that eliminates fraud before it happens.
These robust security features work to protect your business from fraudsters and keep your merchant account guarded against sudden closure due to an excessive number of chargebacks.
Their virtual terminal allows you to take payments in a variety of currencies, and they do this all with impressive security solutions like card tokenization that conceals sensitive buyer information. And in case you’re just not sure how to work their facilities right off the bat, they offer a sandbox version that lets you get the hang of things before you go live with your new payment gateway.
If you’re looking to set up your payment gateway without the assistance of a developer, then QuadraPay’s ultra-easy payment gateway might be for you. Specifically developed for business owners who might want to set up their merchant services on their own, the QuadraPay facility seamlessly and effortlessly integrates with a number of well-known shopping carts for fast and easy use.
Their PCI-DSS compliant payment gateway for online pharmacies comes with a rugged security system that uses a 3DS Filter for added protection for both buyers and merchants. Their facilities also work for both in-store and online transactions, which makes them an all-in-one solution for hybrid businesses that operate both on and offline.
Allowing merchants to accept payments from credit cards, debit cards, well-known e-wallets, and eChecks, the QuadraPay facility provides merchants with advanced fraud and chargeback detection and prevention tools that can come in extremely handy for online pharmacies that are more prone to these potential threats.
Developed for large-scale businesses, FIS Global provides tools and solutions that most payment gateways might not be able to offer. Their features cater mainly to large, high risk merchants that need robust processing power for high volumes of transactions over a period of time.
Based in Jacksonville, Florida, FIS Global sets itself apart with its incredible customer support service that provides 24/7 assistance to clients that need help with whatever hiccups and roadblocks might litter their way to seamless transactions. They also provide professional fraud detection and chargeback protection features that keep customers’ information safe while guarding your merchant account against potential threats.
Another interesting feature from FIS Global is their detailed, real-time reporting that lets you view and monitor transactions as they happen. This impressive feature can come in particularly handy for large-scale businesses that benefit from detailed reports and records to keep track of the high volumes of various transactions that occur in a day.
So what makes a good payment gateway for a pharmacy? There are a few important factors that you need to consider before making the choice. And these specific qualities should help you find a payment gateway that’s truly cut out for the job of accepting payment for your online or physical pharmacy.
Remember that there are a lot of providers out there that will take advantage of unknowing clients because they understand how hard it can be to find a payment gateway that will accommodate high risk merchants. Look into rates and terms before you sign a contract.
Compare estimates, and don’t be afraid to negotiate better terms especially if you have the leverage, like proof of a better deal from a different provider.
What would it take for this payment gateway to terminate their contract with you? And in case that happens, will they charge you for it? Keep in mind that these providers reserve the right to terminate a contract in case of too many chargebacks.
And you’ll often only find out of the termination once it’s done. Read the fine print and ask the right questions. There are payment gateways out there that won’t charge you a penny for termination.
Since fraud and chargebacks are an online pharmacy’s biggest problems, it helps to find a provider that can protect you from both. Rugged security features just help tone down the chances of transaction reversals and protect you from unscrupulous or irresponsible buyers.
Internet pharmacies are under fire, but that shouldn’t stop you from providing good, clean, honest business. If you were looking for a payment gateway to satisfy your business needs, these three vetted choices might be the solution. Just make sure to compare rates, ask questions, negotiate your terms, and shop around to find the best payment gateway for your pharmacy — whether on or offline.