A telemedicine merchant account is ideal for any online business that is selling pharmaceuticals or doctor-prescribed medication online. Payment processing for this type of industry undergoes a stringent vetting process by aggregate merchant account providers, which can make it tough to set up merchant accounts. That’s why it’s best to utilize a high-risk merchant account if you’re operating an online pharmacy.
Telehealth
Why is Telemedicine Considered a High-Risk Industry?
Telemedicine merchant accounts are necessary because telemedicine services are part of a high-risk industry. A telemedicine business is labeled high-risk because of a few factors.
*The section below has been moved up in the article.
Chargebacks In Telehealth
Some companies in telehealth and telemedicine have issues with chargebacks because of the consultation process. Before online visits, patients had to see their doctor to potentially get the prescription they wanted. Now this consultation has moved online. However, there is still the chance that your online doctor will not prescribe you certain medications if they’re bad for your health.
As a result of the rejections after consultations, some telemedicine businesses only supply prescriptions after you upload a third-party prescription. This saves them the trouble of rejecting you and leaving you without the medicine you thought you were paying for. It’s cases like that that result in high chargebacks.
Telemedicine Payment Processing
Telehealth payment processing has some interesting nuances from a transaction standpoint. For one, telemedicine is now highly regulated in the USA. After an influx of illegitimate and untrustworthy websites selling prescription products in the 2010s, Google decided to enforce a more rigorous vetting process for online medicine websites.
As a result, there is now an online telemedicine certification that allows companies to validate their website, products, and overall reputability to sell medication to citizens. Beyond having a good standing with customers, if you obtain certification, you’ll also be able to share online advertisements which can be essential for growing your business.
Risk of Fraud
Because telemedicine businesses are healthcare providers, they store electronic health records. This means a breach could mean the release of sensitive patient information. Payment processing companies know this, making them wary of working with telemedicine businesses. They need to find merchant accounts with high-security measures in place who are comfortable with the risk.
One of the impacts of being high-risk is that many traditional merchant services providers decline to provide accounts for telemedicine businesses.
High-Ticket Payment Processing
Another reason the telemedicine industry is labeled higher risk is because many of their transactions are expensive, known in the payment processing industry as ‘high-ticket.’ Credit card processors and account providers are more wary of these types of transactions because chargebacks and returns that are more expensive have a greater impact on them financially.
Pharmaceutical Merchant Account
Most telemedicine companies aren’t the direct source for their prescription services or medications. As a result, you may find it more beneficial to team up with a company that sells the prescriptions themselves. That way you can focus on bringing in new customers and leads to your telehealth website.
If you’re operating through a fulfillment company, then there’s a chance you will use their merchant account. Their account is likely combined with other companies so they can hedge the risk of any one customer. This is a type of aggregate merchant account provider. However, this means that your business practices directly affect their merchant account reputation. So it’s important to have some key components in place before accepting payments.
It’s also important to note that like the telemedicine industry, the Pharmaceutical industry is also considered high-risk, and many merchant services companies are hesitant to work with them. If you work with their merchant account, it will most likely also be a high-risk account.
