merchantaccountinfo's Journal: Pharmacy Merchant Accounts: Key Considerations

A pharmacy merchant account is risky for several good reasons. Many merchant account services are reluctant to set up accounts for businesses that sell medications online. Though this is a global practice there are lots of ways in which incidents of fraud and criminal activity can be committed through such accounts. Here is actually an breakdown of the potential risks and the reasons why merchant banks frequently are reluctant to open accounts for high risk pharmacy businesses.

Sales from Abroad

A lot of U.S. residents purchase their medications from online pharmacies located in other countries. This is done to save money and obtain the absolute best prices on medications. However, sales to people in the U.S. may be governed by certain regulations and those regulations may change dramatically.

Credit Card Fraud

There are many varieties of credit card fraud that could possibly occur with transactions that occur without having a card swipe. One type of fraud occurs when a charge card is stolen or the number is stolen from a valid owner. By the time the owner of the card realizes the card is missing or even the number is being used fraudulently, the thief may have charged thousands on the account. A different type of fraud takes place when fake credit card numbers have been produced. When there is no verification of a real account a merchant has no way of knowing whether the number is real or not.

Illicit Sales of Medications

Those who use stolen cards or even their own cards may purchase medications online to sell on the street. Various online pharmacies are not linked like traditional pharmacies. An individual may purchase medications from several online pharmacies then turn around and sell them on the street. In the U.S. and in other countries theres a demand for illegal use of prescription drugs. The online pharmacy is at risk of inquiry and inadvertently becoming part of an illegal drug sales operation.

As with any credit card processing a service thats designed for high risk businesses such as the online pharmacy uses several methods of verification for credit card purchases. This helps ensure the user is providing a legitimate account and is also the true card holder. There are a few means of verification. The simplest way to verify and actual card number is usually to request the CVV2 code which is usually a three digit number next to the signature on the back. Verification by expiration date is likewise widely used. For further verification the card holder may be asked to provide billing information including address and phone number. This helps make sure the card holder is definitely the user, rather than a thief or someone who has stolen the card number. Additionally, it cuts down on the likelihood that the card will be used to make quite a few purchases of medications to sell on the street. A purchaser whos name and contact details are verified can easily be tracked.

There are lots of merchant banks that will not approve accounts for high risk businesses like pharmacies. On the other hand, there are a few that are going to and can offer protection from fraud and charge backs.