Because the nutraceutical industry is relatively new compared to other medical sectors, banks often view it as high-risk regarding merchant services. Here are some key reasons why nutraceuticals are considered high risk:

• Lack of Regulations:

While opinions on the FDA's role may vary, many people see its oversight as guaranteeing safety in the pharmaceutical industry. Nutraceuticals, however, are neither tested nor approved by the FDA. Some consumers appreciate this aspect, as it can allow faster innovation and more options to optimize their health. However, the lack of regulation also means not all products are necessarily safe or effective, necessitating an experienced processor to understand the risks and make appropriate recommendations.

• Chargebacks:

Several factors contribute to high chargeback rates in the nutraceutical industry. Firstly, the ambiguity surrounding the definition and categorization of nutraceuticals plays a role. If a merchant makes specific claims about a product, and customers feel those claims are unmet, they may initiate chargebacks. Additionally, less honest customers might exploit strict interpretations of claims to say the product was not as promised.

On the other hand, if the merchant makes only general claims, customers may set unrealistic expectations or misuse the product, leading to dissatisfaction and demands for refunds. In both scenarios, dishonest customers might use this ambiguity to make fraudulent claims.

• Subscriptions:

Some nutraceutical merchants use a subscription billing model. The average decline rate for in-person transactions with a physical card present is only 1.4%. In contrast, the decline rate for online purchases, including recurring payments, is around 15%, and sometimes even double that. In such cases, businesses often struggle to get new credit card information from customers after a card is declined.

Due to these and other factors, traditional banks and payment processors consider subscription merchant accounts high-risk.

• Quality Concerns:

While many companies produce high-quality products, the allure of this industry’s profitability and its lack of regulation have led to an influx of new entrants, some of whom lack ethical standards and transparency in both products and marketing strategies. This is an area where Host Merchant Services stands out: where mainstream processors may shun an entire sector due to a few unscrupulous players, Host Merchant Services' in-house underwriting and extensive experience in managing risk allow it to distinguish between quality businesses and provide the support they need to succeed.

• Misleading Media:

The long-standing dominance of traditional medicine has led both mainstream and alternative news outlets to circulate misleading information about this industry, which can discourage consumers from trying its products. Large banks, wary of reputational risks, tend to avoid associations with industries that may be deemed controversial, both now and in the future.

Secure payment processing is crucial in the diet and supplement industry, where customer trust is essential. Here's why:

• Fraud Prevention and Security: Advanced payment gateways safeguard transactions by encrypting sensitive data during transmission using protocols like SSL and TLS. They also employ tokenization to replace sensitive data with unique tokens, and multi-factor authentication (MFA) requires users to provide multiple forms of identification, enhancing fraud detection and prevention.
• PCI Compliance: Adhering to the Payment Card Industry Data Security Standard (PCI DSS) ensures a secure environment for storing, processing, and transmitting payment data. Compliance can prevent costly breaches and penalties while boosting customer trust and confidence.
• Customer Trust and Brand Reputation: Secure payment systems with robust fraud detection and protection mechanisms build customer confidence and foster brand loyalty.
• Smooth Transactions: Payment gateways and secure systems streamline transactions, enabling real-time verification and processing, contributing to customer satisfaction, and reducing cart abandonment.
• Global and Regional Dynamics: The payments industry varies globally, necessitating localized solutions and security measures.

We offer nutraceutical merchant accounts for a broad range of sub-industries, including:

Starting a nutraceutical merchant account with Host Merchant Services is a straightforward process. After completing a quick application, nutraceutical merchants must provide the following documents to initiate the underwriting process:

• Valid Driver's License or Passport
• Social Security Number or Employer Identification Number
• Voided check from the business’s checking account
• Payment processing statements from the last three months
• Bank account statements from the last three months
• A fully functional website with a shopping cart

Host Merchant Services as a Level 1 PCI-compliant trusted partner for many of the world's leading nutraceutical companies, offering a global network of partner banks, payment experts, and a comprehensive portfolio of tailored solutions. Thousands of merchants, ranging from start-ups to large enterprises, rely on Host Merchant Services' expertise in high-risk payments to process millions in processing across a variety of industries securely. Host Merchant Services also offers dedicated account manager guidance and solutions to ensure compliance with banking and payment card industry regulations.

Host Merchant Services' team of payment experts and the company's proven track record in nutraceutical offerings ensure a successful launch and scalable growth for your nutra business. Here's how our specialized payment processing solutions can empower your business to scale confidently:

• Swift Sign-Up: Our online application is designed for quick and straightforward completion, taking just a few minutes.
• Rapid Approvals: Our streamlined process ensures your application is approved quickly, allowing you to accept payments promptly.
• Transparent Pricing We strive to secure the lowest possible rates for your account with no hidden fees.
• Versatile Solutions: We partner with multiple banks to offer both domestic and offshore solutions, giving you the flexibility your business needs.

Ready to take your nutraceutical or supplement business to the next level? Say goodbye to banking obstacles and secure your online venture with a trusted nutraceutical merchant account from Host Merchant Services. We specialize in managing fraud and chargeback risks, ensuring your peace of mind while you focus on growing your business.

We've got you covered with the highest approval rate, fast approvals, lifetime standard rates, and 24/7 customer support. Don't let banking hurdles hold you back – reach out to Host Merchant Services today and embark on a journey to seamless payment processing!