We, at Quadrapay, have the foresight to become industry’s best support system in getting high risk merchant accounts for different high risk industries. With the deeply rooted vast network of best in class banks, acquirers, payment gateways, payment processors and merchant service providers, we resolve our clients’ issue with utmost diligence. Specifically, in the field of nutraceutical industries, we provide complete turnkey solutions regarding high risk nutraceutical merchant account. Whether it be a payment gateway or a high risk merchant account for nutraceutical business, we are ready to help you. You can log onto www.quadrapay.com and fill our easy registration form. You can also reach us at [email protected] or dial our 24/7 helpline +1 63183 21773. The ISO 9001:2015 certified Quadrapay.com is dedicated to help merchants from high risk industry. Get rid of the market hassles and optimize your profits by expanding your online business with the help of team Quadrapay.
What are different charges and fees for Nutraceutical Merchant Account?
Usually, there is a provision of setup fees with offshore nutraceutical merchant account providers and payment gateways. A merchant should negotiate for transaction fees (TDR and MDR), fixed transaction fees and monthly charges to get the best deal. Today, the range of transaction fees is somewhere between 4.5% and 8%. A high risk merchant account for nutraceuticals has to bear large rolling reserve as well. The statistical analysis of Quadrapay has shown the average rolling reserve to be 10%. For cross-border transactions, wire fees are also a crucial factor.
The arrear or hold period is generally 1 to 3 weeks, depending upon the risk factor of the nutraceutical business. A merchant should also enquire about chargeback alert and notification services and pre-authorization services as well. These services help merchants in smooth functioning of the nutraceutical merchant account without any problems. As, subscriptions are involved in nutraceutical industry, recurring or continuous billing is also there. Thus, a merchant should also ask the service provider regarding fees and charges related to return and refund. Last but not the least, chargeback penalty also marks a big part in finalizing an offshore merchant account for high risk business.
Nutraceuticals are generally defined as the derivatives of natural and herbal food sources that have additional health benefits. These are often used as Pharmaceutical products also. The term that was coined almost 30 years back, has not taken major portion in medical and pharmaceutical industry. There is always a constant debate related to the classification of nutraceuticals as a dietary food supplement or a nutritional drug. Because of the regulations and strict law related to the specific categorization of nutraceutical products, the whole industry has been thrown into the category of high risk industry. The major difference between Pharmaceutical and nutraceutical products is a doctoral prescription. A person doesn’t need any doctor’s advice before getting nutraceutical products. They have often been termed as health and fitness supplements or natural rejuvenating medicines.
Overview of the Nutraceutical Industry and need of Nutraceutical Merchant Account
The classification of nutraceuticals has been different for different jurisdictions in different countries. With the expansion of Technology and development in science, people are getting more and more aware of health benefits. This is the major reason that nutraceuticals are getting extremely popular. From maintaining a fit physique to professional bodybuilding and even as a remedial medicine, the naturally produced phytochemicals or nutraceuticals are widely used around the globe. Mostly this is governed by FDA. The Global nutraceutical market is expected to grow to double its size by 2022 and cross 600 billion-dollar limit. With such a growing industry, nutraceutical merchants billing in this high risk business are still facing a lot of hindrances. Getting a high risk nutraceutical merchant account is really difficult in this business. Private and Multinational organizations around the globe have held multiple conferences, summits, and exhibitions to explore, expand and grow the industry domain further. The work of such an international congress has accentuated the awareness of nutraceuticals in common men, and infinite possibilities of development and expansion have arisen.
In earlier discussions as well, Quadrapay experts have explained that getting a high risk merchant account for nutraceutical industry is extremely difficult with the domestic banks and acquirers. Although a merchant can find many offshore service providers who can readily onboard nutraceutical merchants, yet finalizing the most appropriate processor is no less than a herculean task. The online market functioning and transaction flow is totally dependent on type of the high risk merchant account and quality of payment gateway.
The major reason for nutraceutical industry to be categorized as high risk industry is high chargeback ratio. Apart from this regulatory imposition there are other reasons as well. When a nutritional or dietary supplement is passed for human consumption by government authorities, it must clear the entire laboratory test and prescribed ingredients guidelines. Involvement of regulated or prohibited ingredients or exceeding the permitted limit can put nutraceutical product under a ban.
The two factors together lead to the causation of high risk nutraceutical industry. If we look deep into various reasons of high chargebacks on nutraceutical Merchant accounts, it is because of illegal and fraudulent activities involved by some of the nutraceutical merchants that lead to severe chargebacks. Though less but the instances of friendly frauds, still account for the negative impression of this industry. Some of the start-ups to get higher profits, lure customers to sign up for free and later enroll them for monthly subscriptions in a disguised way. Later, when the customer gets to know about it, a chargeback is filed on behalf of the customer. Recently, there have been many such cases. We suggest nutraceutical merchants to follow ethics and lawful policies to expand and establish the business. Apart from this maintaining strong customer relationship and providing quality products with continuous feedback can also save merchants from high chargebacks, thus leading to stable and growing business.
How to get a High Risk Nutraceutical Merchant Account?
Industries worldwide have been classified as low risk, mid risk and high risk industries. Domestic banks and acquirers are quite comfortable in giving merchant accounts to low risk and high merchants, but they step back from providing services to high risk merchants. Nutraceutical merchant accounts, being high risk are mostly avoided by domestic banks and processors. As we have discussed the need for high risk merchant account for nutraceuticals in our previous segment, merchants must look for the best processors to help their online businesses.
The underwriting guidelines for high risk nutraceutical merchant account are strict, obstructive and rigid in domestic banks and acquirers. There are little chances of getting a high risk merchant account for nutraceutical business, unless you have a very good credit history, strong financial base, genuine documentation and adroitly planned business model. If the underwriter goes with an optimistic approach, you may get a nutraceutical merchant account.
The easier option for merchants in nutraceutical industry is to work with offshore high risk merchant account providers. There are many offshore service providers ready to onboard high risk nutraceutical merchants. This is crucial for a merchant to find the most suitable offshore nutraceutical merchant account provider for his unique business model. At the time of application submission and initial onboarding procedure, terms and conditions are agreed upon. This also includes the fees and charges for the services provided. Generally, the application process takes 5-7 days, and the merchant can negotiate with the processor for competitive rates and charges.
What factors affect the selection of an Offshore Merchant Account for Nutraceuticals business?
There are various factors to keep in consideration while deciding the right offshore service provider for a nutraceutical business. These are –
When it comes to offshore nutraceutical merchant account providers, the age of the processing company matters a lot. A well established processor can efficiently manage the merchant account and provide best in class services.
The ability to accept payments from multiple Nations is also a crucial factor while deciding the payment processor for your nutraceutical merchant account. In today’s world, Global outreach is really essential to expand the business.
Mostly customers will prefer to buy in their local currencies. Thus the acquiring bank or processor should also offer multiple transaction currency options. Not just about the customers but the mountains also prefer to be paid in the local currencies. Hence, the number of settlement currencies offered by an offshore nutraceutical merchant account processor also matters.
Pre-Authorization helps merchants introducing chargebacks and fraud instances. Quadra pay.com suggests nutraceutical merchants get merchant accounts with this service.
Monthly and annual subscriptions contribute to a larger part of sales in the nutraceutical industry. Merchant must check if the merchant account providers or payment processors offer subscription, recurring, trial and continuity payment options.
A merchant must negotiate with the offshore nutraceutical merchant account provider in order to get the deal with the minimum rate of transaction.
Location of the acquiring Bank also matters a lot. If the Offshore merchant account provider for nutraceutical business is located in any of the developed or fastly growing country, then it adds to the maximum approval of transactions in terms of global processing.
The number of payment options provided by a merchant account processor also defines the business domain expansion of the merchant. With multiple payment options like Credit/Debit Card processing, wire transfer, internet banking, ACHandEcheck, etc. merchant can easily split the volumes of transaction and maximize the profit.
Rolling reserve effects nutraceutical merchant account in a drastic manner. This is advisable that a merchant must avail the services from the offshore service provider with the least rolling reserve.
If you are also a merchant dealing in the nutraceutical industry, you can reach out to Quadrapay.com for the expert advice and complete assistance of Quadrapay business experts. We are ready to help you with a high risk nutraceutical merchant account from our reliable and quality service providers along with a payment gateway with best-in-class speedy services.
What is the definition of chargeback ratio and how does it affects a Nutraceutical Merchant Account?
Chargeback ratio can be defined as the total number of chargebacks in a month divided by the total number of transactions in that particular month. The percentage equivalent of this calculation explains the chargeback ratio. Our experts suggest that the charge battery shows should be typically kept below 2%. Let us take an example to understand it better, if there are 500 transactions in a merchant account per month, then the threat limit of chargeback is only 10. To maintain the stability of your account, it is suggested that the number of chargebacks, in this case, should not be more than 8.
Subscriptions and recurring billing are the main issues that result in high chargeback instances. At times if the customer is not aware of subscription, they file a chargeback for the complete amount, and this creates a problem for the nutraceutical Merchant. We suggest merchants to avail chargeback alert and notification services, which informs the merchant at the time of dispute and a refund can be settled with the customer before the chargeback is initiated. Apart from this, merchants should also ensure strong customer relationship and continuous feedback to improve the quality of products and services. With a variety of payment options available, we also suggest nutraceutical merchants to use Echeck and ACH, or Check 21 solutions for the payments. If the merchant is not able to maintain the chargeback ratio below the suggested limit of 2 %, it may lead to the shutdown of the nutraceutical merchant account.
Whether you are an established merchant or a new start up dealing in nutraceutical industry, you must have a nutraceutical merchant account and payment gateway to carry on your online business and grow further. The world has become smaller because of The E-Commerce and online marketing. Every customer has a global outreach to all the products and services available in the world. Thus, availing the best in class services for your online business is really crucial.
If you are facing any trouble in finding perfect nutraceutical merchant account for your specific business model, Quadrapay can help you good the best one for you. You can simply log onto www.quadrapay.com you can mail us your inquiry at [email protected]. Our 24/7 helpline is also active to help you resolve issues on +1 63183 21773.
What is White Label Nutraceutical?
White labeling is a new evolution in the financial market and it has taken away the nutraceutical industry in a dramatic manner. Many of the new start-ups or not capable enough to manufacture nutritional supplements (nutraceuticals) on their own. Some of the large scale manufacturers with all government clearances and certifications come at the rescuer for these small business establishments. They manufacture supplements and products for these companies and allow them to label the products as their own for retailing and market expansion. These days there are many a white label nutraceutical are available in the market which can cater to the requirements of all kinds of nutraceutical merchants.