Creating an online pharmacy store is having the best of both worlds in that you fulfil your entrepreneurial dream while having the satisfaction of helping people lead a healthier and better life. What’s more, you also gain a wider client base since the internet is boundless. Setting up an online pharmacy is dependent on providing a broad choice of non-prescriptions over-the-counter (OTC) drugs, giving prescriptions, delivering on time and enhancing the lives of your customers (patients). Of course, online pharmacy merchant accounts will be necessary.
An online pharmacy store is largely an under-exposed industry, even today.
In 2010, prescription drugs made $158 billion online in the US alone. When compared to the entire pharmacy market, estimated at a little over $100 billion, online sales only stand at a mere 0.15 percent of the entire pharmacy industry. — This means there is a lot of room for growth and profit for an online pharmacy merchant account.
This proves that an online pharmacy merchant account has huge untapped potential.
Start-up pharmacy merchants have brought in many value-added changes for which other online pharmacies have yet to introduce. Online pharmacy merchants require customers or patients to submit the prescription, but we are seeing these emerging start-up online pharmacy merchants going the extra mile by physically collecting the scripts from the patients.
This is something that is likely to keep the customer as a returning one.
In addition, this extra service is also helpful to verify the patient’s script with the patient’s identity.
When a pharmacy merchant decides to launch an online pharmacy site, they should acquire a pharmacy merchant account to receive debit/credit card payments from their clients since these accounts will manage the majority of the pharmacy’s financial transactions. It needs therefore to belong to a reliable institution or payment processing company such as Octapay.
It should not only process the payments in time but also provide security protection of the pharmacy store. Since an online pharmacy needs to open a high-risk pharmacy merchant account, they need to follow certain guidelines, which include the following:
Here at Octapay, we provide a customisable and ideal merchant account solution for any legal pharmacy business. Our pharmacy merchant account features:
The time it takes for an online pharmacy merchant account to be approved will depend on the type of solution you choose.
Here is a list of the required documents for an application of an online pharmacy merchant account. Take note that the list of KYC document requirements may be a bit longer than the following.
For US-based merchants, the rate of transactions ranges from five to 10%. For those outside the US, the rate can go from 10 to 13%. Most of the processes charge a ‘per item’ fee. This can go up to $-ꭕ per transaction. Also, the processor may charge a fee for ‘insufficient funds’ transactions as well as returns.
Each high-risk business needs to accept a rolling reserve. This is particularly true for online pharmacies merchant accounts.
Most online pharmacies need to pay five to 10% of the rolling reserve. In some cases, it can go as high as 20%. This rolling reserve aids the payment processing company in paying for any future chargebacks.
Obtaining medicines online is now available. As recent statistics show, the global online pharmacy market is expected to reach $130 billion by 2023. An Online pharmacy will need a merchant account as well as payment gateways to do business easily and safely. With credit or debit card processing accounts, internet pharmacies can grow exponentially.
However, the Online Pharmacy Industry is a high-risk business. Thus, it is hard to earn an approval for a pharmacy merchant account. The sole reason is due to the rejection of banks and merchant account service providers, which has the tendency to give the business frequent chargebacks.
This increased risks of chargebacks and refunds can make a lender too cautious in approving an application for an online pharmacy merchant account. Also, it’s not as if they do not want to give you service, but they need to be cautious about their money.
However, you can convince them to trust you in having lower volumes of chargebacks. Show them your sales, credit card history and chargeback track records to win their trust.
Online pharmacy merchant accounts are directly related to a person’s health and wellbeing. Any item or product that humans consume receives, understandably, more analysis from government regulators than any other products. This means that there is a high requirement for these products to make it into a virtual or even an actual store shelf.
Also, it is owed to the very nature of the industry. The online, notorious sale of narcotics.
In addition, online pharmacies usually draw high chargeback rates and ‘friendly frauds’ that make acquiring banks cautious of taking a monetary risk.
Lawsuits are another issue for an online pharmacy merchant. If you’ve ever seen ads for law firms that look for patients who took specific products, these firms claim that the medication causes serious side effects. Whether these are well-founded or not does not affect the result that online pharmacies will be considered high risk.
Regardless of the truth, the idea that medication is creating health issues can push patients to act. They would want a refund if they took the drugs. In such cases, the pharmacy will face an investigation from the credit card provider. While the provider investigates the claims, the online pharmacy will have thousands of dollars to hold. Consumers like the ability to ask for refunds. However, this process can provide a lot of stress for merchants.
Also, as one New York Times article recently explained, the risks of medication being dispensed is so great since it has the potential to cause harm and even death to customers, especially in an online environment.
This is not easy, but it is not impossible to do. First, you will need to void high chargebacks and stay within the required chargeback limits. In general, a chargeback ratio needs to be below 2%. Otherwise, there’s a high chance of your account shutting down.
Next, you need to work in the guidance of government and FDA rules. This should ensure you follow lawful procedures, which will keep your online pharmacy merchant account safe.
For more information about how to open an online pharmacy merchant account with Octapay, please feel free to contact us today. We have a solution for you that will suit your high-risk pharmacy merchant needs.