In recent years, food as medicine has garnered the attention of consumers and entrepreneurs alike. Nutraceuticals, the burgeoning intersection between sustenance and wellness, are now enabling health-conscious customers to use food byproducts to assist in the prevention and treatment of diseases. As you go about setting up your dietary supplements, herbal/natural products, or health-giving foods nutraceuticals business, however, there are some special considerations that you should thoroughly understand before you get started.

The issue of “high-risk” categorization.

Initially, you might have thought that your biggest challenges as an entrepreneur would be finding capital and determining the products that would appeal to your customer base. In fact, it may not even have occurred to you that credit card processing for nutraceutical businesses would represent a potentially larger obstacle than all of the others combined. That’s because nutraceutical companies fall into the umbrella category of what is known as high-risk businesses.

Like everyone, merchant account providers are here to make money, and they get fewer and harder-won financial rewards if the companies with whom they partner fail to make their payments or cause them to have to do a lot of extra work. As it turns out, there are three major characteristics of the nutraceuticals sector that make conventional processing companies nervous.

• Buyer or subscriber remorse. This happens when a customer regrets their purchase or recurring billing subscription and initiates a chargeback in an attempt to get a full refund — at the merchant’s expense.
• Lack of customer service or other infrastructural business necessities. If a customer needs help and has difficulty obtaining prompt and reliable assistance, they will quickly become suspicious of the business and its products. Not only will they not buy merchandise in the future, but also they will often bail out on their current purchase.
• Exaggerated claims. Nutraceuticals are not regulated by any governmental agencies, including the FDA. Either on purpose or unintentionally, businesses in this sector may make claims about what they are selling that are inaccurate or not consistent for all consumers. Again, this leads to chargebacks and extra effort on the part of the payment processing company.

However, in spite of the fact that your company could be placed in the high-risk category, all is not lost. In fact, you can sign up with a high-risk payment provider who is particularly qualified to meet the unique needs of your enterprise, resulting in smoother transactions, happier customers, and more profits for you.

Choosing the best high-risk payment processor.

Conduct even a quick Google search of high-risk merchant providers, and you will soon see that the market is saturated with companies competing for your money. Not surprisingly, not all of them are created equal. Since you will be partnering with one of these businesses for years to come, it makes sense that you should be careful to make the right choice. To that end, look for the following characteristics.

• Experience working in the nutraceuticals industry. When you work with a company that has demonstrated expertise in your particular niche, you are more likely to be able to forge productive relationships with banks and other financial institutions. Furthermore, your high-risk processing company will be well-equipped to guide you through any regulations or changes in the security landscape that are particular to the nutraceuticals sector.
• Competitive rates. Although you should not automatically assume that the lowest price is always best, there is no reason that you should be burdened with unreasonable charges or contractual obligations. While some costs are non-negotiable, you have a good deal of leeway with others. Don’t be afraid to haggle.
• Chargeback prevention and mitigation. Forced refunds from your customers cost you money, eat up your time, and, in the worst case scenario, might even lead to closure of your account. Therefore, it is important to collaborate with a provider that is committed to maximum security and fraud prevention throughout their payments ecosystem.
• Offers high-volume payment processing. In order to minimize their risk, many providers limit the amount of payments their high-risk clients can process during a particular month. This hampers your ability to grow in this explosive industry. Fortunately, not all merchant account companies have these restrictions, so choose accordingly.
• Multiple payment options. Today’s customers want choice when it comes to how they complete their purchases. In addition to credit cards, your company’s software should be flexible enough to accept debit cards, ACH, Apple and Google Pay, and digital wallets.

If you accept nothing less than an option that provides you with the customized features you and your customers demand, you can look forward to an effective, long-term relationship with your high-risk merchant account provider.

Applying for a nutraceuticals merchant account.

Before we get into the action steps involved in getting your payment processing nailed down, it’s important to spend a minute discussing what distinguishes a high-risk payment provider from a “conventional” one. For one thing, the application process will most likely be longer and more involved. Additionally, your ongoing costs and fees are almost sure to be more significant, especially in the first few months of your company’s existence.

Now that you understand that you will be subject to additional scrutiny and expectations, it’s time to understand the steps involved in the process of obtaining a high-risk merchant account for your nutraceuticals business.

• Do some research to review the many options available to you, keeping in mind that the lowest-priced option is not always the best. If you have colleagues in the industry, seek their recommendations as well.
• Sign and submit an application. The approval process will usually be completed in three to five days, with international businesses taking up to two weeks.
• Prepare for the underwriters. This team will scrutinize every aspect of your application and business, including your credit and debt history, the products you intend to sell and the claims you make.
• Examine all of your platforms to be sure that your message is consistent throughout your brand.
• If you have a history of chargebacks, be ready to explain why you have a large amount.
• Demonstrate excellent customer service by answering all emails and phone calls promptly. This is always a good practice, but it is especially important during the time when underwriters are inspecting every aspect of your company.

Making a conscious commitment to thoroughness and transparency throughout the application process will help to lay the foundation for a mutually beneficial relationship with your merchant account provider.

The compound annual growth rate (CAG) of the nutraceuticals industry is estimated to be a robust 3.7%. With that in mind, a well-run business can look forward to handsome profits for years to come. Make sure the odds of success are in your favor by finding a high-risk merchant account provider that has what it takes to help your business grow in this lucrative sector.