What are Supplements?
There are a variety of different supplements available to consumers depending on their needs. Supplements can be used for various reasons, from health to weight loss or for sports. The most common types of supplements in the market today include:
- Vitamins and Minerals
- Herbals and Botanicals
- Sports Nutrition
- Weight Management
The problem with many of these supplement markets is that the products are not FDA-approved. Products sold without FDA approval risk being prohibited from sale by states. While the product’s manufacturer must adhere to Federal regulations for safety, the products need only FDA registration to be sold.
Since supplements can be sold without FDA certification of their claims, most banks and payment processors have classified them as higher-risk products. This labeling has made applying for and approving a merchant account difficult.
Two of the most common supplements today with difficulty in securing supplement merchant accounts have been SARMs and Peptides. These supplements have experienced problems due to their use as a muscle-building steroids. While these products are not illegal, most banks have distanced themselves from high risk merchant businesses facilitating the sale of these items.
What are SARMs?
Selective Androgen Receptor Modulators, commonly referred to as SARMs, are synthetic drugs that act similarly to steroids in the human body. By helping to change your DNA to speed up the body’s ability to grow muscle, SARMs have been compared to anabolic steroids. Unlike the steroid drugs familiar to most people, SARMs can target muscles and avoid impacting other body parts.
What are Peptides?
A peptide is an amino acid compound that is a smaller protein version. Peptides were designed for users to designate the intended results. Used in several different health and cosmetic products for their anti-aging and anti-inflammatory properties. Commonly peptides are used in skin care products to repair collagen, as a weight-loss aid, and as a muscle-building supplement to improve recovery times.
Merchant Account Options for Supplement Merchants
SARMS and Peptides are legal in the United States to sell and possess. The one caveat is that they are not available for human consumption. This has made it difficult for many businesses to find a peptides merchant services company willing to accept transactions knowing the fine line that exists in the legal system. These problems have not slowed the demand for peptides; consumers continue wanting them, making online sales high risk and extremely difficult to accept.
As the availability of credit card processing for supplement merchants in the Peptides industry has all but dried up, merchants have reached out for alternative high risk payment methods. One of the most widely used methods of SARMs payment processing has been through electronic checks. Unlike most larger banks that work with credit card companies, e check processing is done on a smaller level. The market has remained strong and the e-check industry continues to process transactions for the SARMS and peptides industries by following all local government regulations.
How does a Supplements Merchant Account work
Payment card-based transactions, whether debit or credit, are handled through the same process for storefront and online sales regardless if it’s a trial or recurring sale. These transactions will use the same financial services companies when attempting to authorize a customer transaction. The organizations involved in approving a peptides credit card processing transaction include:
- Merchant Acquirer: The acquiring banks maintain the relationship between the merchant and the payment card association. Working with or as the payment processor, the acquirer handles underwriting and account management for the merchants. Acquirers also ensure that the business fully complies with products sold and services offered.
- Card Issuer: On the consumer side, the card issuer maintains the relationship with the cardholder. The card issuing bank manages the customer’s account and provides security to prevent fraud or other problems. The card issuer receives merchant requests for payment authorizations and decides whether to approve or decline. The issuer also ensures that payments are sent to the merchant once the transaction has been finalized.
- Payment Card Network: The most recognizable names in the payment card industry are the card network members. Companies such as Visa and MasterCard have built these vast financial networks into some of the largest in the world. Providing security and simple functionality has been the driving force behind the growth of these networks. As customers have become more and more comfortable with using payment cards, the industry is in a constant growth curve.
- Terminal: The terminal can either be a physical machine in the merchant’s storefront or an online application integrated into a merchant’s website. Both types of terminals offer security for both the merchant and cardholder alike. Online terminals, known as a virtual terminals, are part of a payment gateway and allow a business to log in to process transactions manually.
- Shopping Cart: Merchants operating an e-commerce store must install a shopping cart on their website to handle customer orders. Customers can enter their payment card information through the shopping cart and securely send it to their card issuer for approval. Working with one of the larger shopping cart programs will make integration much easier for a business when looking for a merchant account.
Customers making a purchase will either swipe their card at the business storefront or enter the card information into the shopping cart of the merchant’s website. Card account information for the payment authorization will be sent from the terminal location to the acquiring bank to enter the payment card network. All information about the transaction is encrypted between the customer’s web browser, the payment gateway, and the merchant acquirer.
The transaction information is deciphered at the payment card network to determine the card brand and card issuing bank. The authorization request is sent to the appropriate bank where security and financial checks are performed to verify the transaction’s validity. If there are no concerns and the account has the available credit, an approval response will be sent back to the merchant. Similarly, declined authorizations will be returned to the business location, informing the merchant and the consumer.
Requirements for Merchant Accounts
Merchants preparing to apply for peptides credit card processing services must provide various supporting documents. Some of the most common documents required by payment processors and merchant acquirers for the supplement market include:
- Completed Application
- Copy of ID
- Voided Check
- Bank Statements
- Previous Processing Statements (if available)
The most important piece of the peptides payment processing application is providing a completed application for the underwriters to review. Full information about the business will allow underwriting teams to vet the merchant and run background checks on the applicant and the business.
Underwriting teams and merchant services agents will need IDs of the applicants to verify their identification. Since SARMs credit card processing services operate similarly to a credit agreement, fees are assessed and collected by the credit card networks every month. This is why acquirers want to know a merchant’s full identity and financial history.
Providing a voided check from the merchant’s settlement bank account is an important supporting document to ensure that payments are properly sent to the merchant. Incorrect information on the application can create problems for the acquirer and card issuer if payments are returned because the account does not exist.
Businesses that are not startups will normally need to provide copies of their most recent bank statements. Most merchant account underwriters will want to see at minimum the last 3 months while providing the last 6 months will help give a complete view of the company’s financial record. Underwriters do not want to see a history of overdrawn transactions or bounced checks, signs that the business does not have the proper reserves to cover monthly fees and any potential refunds.
Merchants with an existing merchant account must show underwriters the most recent history. Generally, the last 3 months is required, but providing the last 6 will help ensure that the accounts are approved in a streamlined manner. Underwriters will want to verify that there are no problems with the merchant, specifically excessive refunds or chargebacks.
Benefits of Merchant Accounts for an Online Supplement Business
Though credit card processing services are not available for SARMs or Peptides, other forms of payment have taken over for the Peptides and SARMs industries. Occasionally credit card processing solutions present themselves, but they are unreliable. This is why accepting echeck has emerged as the best alternative.
Without the risk of having accounts closed by either the payment processors or card payment networks, echeck will allow businesses to operate without concerns. Echecks also have much lower pricing than credit card merchant accounts, reducing business operating costs while providing comparable services.
Set your Supplements Business up with Merchant Account Services today!
Contact one of our Peptides payment processing professionals for more information about the available services for your business in the supplement industry. While SARMs merchant processing can be hard to find occasionally with some banks, the Allied Payments team has relationships to help almost any high risk business accept payment online. Contact us today to help keep your business thriving in the supplement market and start accepting payments online for these products.