Finding reliable and affordable merchant account services has been the most difficult challenge facing many of the pharmacy operators today. Only a few solutions are available with astronomical rates and fees attached to these accounts, merchants have experienced difficulty in finding long term solutions. One of the most reliable and economical ways businesses have solved this problem is by using pharmacy echeck processing services.
Other merchants have decided to pursue credit card processing services to handle their pharmacy transactions. This has not always been an easy task, with payment processing services coming and going, many merchants have simply shut down their pharmacies. After numerous failed attempts for honest and reliable merchant services, many merchants have concluded that pharmacy merchant accounts are not possible.
What are Pharmacy Merchant Account Services?
Businesses that operate online need a financial services account that allows them to accept payments. As more and more consumers turn to online purchases, the demand for merchant accounts has followed in step. Most transactions occurring online use some type of payment card; whether its a credit card or debit card. The future demand for ecommerce and merchant account services does not appear to be slowing down any time soon.
Most pharmacies have experienced trouble establishing reliable and affordable merchant services for themselves. This problem is due to the many terms and conditions along with restrictions imposed on banks, payment processors and the payment card industry. Government regulations regarding pharmaceuticals and the problematic history of online pharmacies have made these merchant accounts all but impossible to find. Many merchants in the industry have exhausted their search and resorted to more consistent solutions including echeck payment processing services.
One of the most common ways pharmacies set up their merchant services is through an aggregated merchant account. Similar to an eWallet system like Stripe, aggregated payment processing allows merchants to combine their payments with other businesses to remain relatively unnoticed. In many cases, this has helped pharmacies remain operative for longer periods than obtaining a dedicated merchant account. Though the fees for the services are substantially higher and payouts much slower, for some merchants it remains their best option.
How Does Pharmacy Credit Card Processing work?
Payment card transactions accepted online or through a terminal have many similarities with how they are handled. Customer account information is sent along the same circuit, using all the same protocols and security measures as a general retail transaction would require.
The most notable organizations involved in a credit or debit card transaction is the payment card network. This includes the likes of Visa, MasterCard, Discover, and American Express along with other payment card schemes. The payment card association provides the connection between the merchant’s acquiring bank and the customer’s card issuing bank. Along with security, the network also maintains the technology to keep up with demand.
Every payment card transaction, including debit and credit cards, will require the services of a payment processor. Sometimes the processor also acts as the acquiring bank, this organization receives the payment authorizations before sending the request to the customer’s bank. The payment processor handles the technical support and other account management services for merchants.
Between every merchant and the payment card network is the acquiring bank. In some instances, the payment processor will also be the acquirer, but many times they are separate organizations. The acquirer maintains the direct relationship between the processor and the payment card network, accepting liability for the merchants approved through their channels or the payment processor. The security of the merchant’s network is maintained by the acquirer through PCI-Compliance guidelines and regular security checks.
The other end of the transaction includes the customer. The bank used by the customer, known as the card-issuing bank, handles the account maintenance of the customer credit or debit card accounts. These are some of the largest credit card banks like Capital One, Chase and Citi. The card issuer performs various security and financial checks on every authorization request, protecting themselves, the customer and potentially the merchant.
The final piece of a credit card transaction is the terminal. This allows the merchant to collect the customer information and send it to the payment processor. The terminal can be either a payment gateway on the merchant’s website, a virtual terminal operated online or a physical terminal in a storefront. Regardless of the type of terminal, the equipment and software need to be completely PCI Compliant to prevent the risk of any losses.
Authorization requests start at the merchant location with the customer card, and account information is sent through the payment processor and acquirer to the payment card network. At the network, the type of card is determined and the request is passed along to the card issuer for approval or denial. Once a determination has been made, the card issuer sends a response back through the network to the acquirer and informs the merchant if the transaction is approved or denied.
This entire process takes a matter of seconds, but allows merchants to accept pharmacy payments from nearly any customer in the world using a partner credit or debit card.
Concerns facing Pharmacy Payment Processing services
Selling various pharmaceutical drugs creates concern and challenges for merchants and payment processors alike. Some of the most common issues seen during the underwriting of pharmacy merchant account applications include:
Making sure that the merchants the acquirer and payment processor are contracting with has a good track record is essential to starting a long term payment processing relationship. Merchants that have a history plagued with problems or other troubles will usually not be approved, or if they are approved, will quickly have their merchant accounts shut down.
Excessive chargebacks can mean a few different things about a business. The way they accept payments could be misleading or even fraudulent. This is why having a terms and conditions page along with a refund policy will help reduce the number of chargebacks a business faces. Another concern could be the fulfillment time. Products that take a long time to be delivered are usual candidates for a chargeback.
Merchants that have a history of violating guidelines, whether it be from the payment processor or government, stand the possibility of repeating. Offenders that have sold controlled substances might find it extremely difficult to set up with another payment processor if they have been dropped by another.
One of the final checks is that of the TMF, or match file. Merchants who have had their pharmacy credit card processing services revoked due to one of the above reasons, or owe money, might find themselves on the TMF list. Once a merchant is listed it becomes extremely difficult to be removed and most payment processors will not partner with that merchant.
Besides these main concerns, most pharmacy payment processors are willing to work with merchants as long as they abide by all rules and regulations.
Start Accepting Pharmacy Payments Today!
Merchants ready to apply for a pharmacy merchant account are welcome to contact our payment processing team. Our team of pharmacy merchant services professionals will be happy to help apply your business to our payment processing network. If at any time merchants have questions, our support team is available to help resolve your concerns.