We received a call recently from a gentleman in search of an e-commerce merchant account processing solution for his pharmaceutical business. Our prospective merchant claimed to have been in business for ‘years,’ though had never processed credit card transactions before, and was thus looking for a good solution.
The fact that he had no history of processing credit card transactions, coupled with his industry, created a no-win situation, and the conversation took a downturn.
It’s a little known fact with regard to how acquiring banks view merchants: a merchant can be in business for 10, 20 or 50 years with payment processing history through check solutions, cash or bank transfers. If that merchant has never processed credit card transactions, however, he is looked upon as a startup by an acquiring bank.
Our prospective merchant didn’t like that explanation.
Some things we need to know to get started
When a prospective merchant approaches us seeking e-commerce merchant account processing solutions, there are always several core questions we’ll ask that require answers straightaway:
- Industry type
- What kind of solution they need (credit cards, MOTO, virtual terminal)
- Your country of registration and target market
- Payment processing history
A prospect’s processing history, whether it’s credit cards, check solutions or MOTO/virtual terminal, is arguably the most important detail we need to know.
Back to our prospective merchant…
Upon our explanation, the merchant was stunned and rebuffed our claim that his business would be considered a startup by any one of our acquiring banking partners. Compounding the situation was the fact that, because he’d be considered a ‘startup’ pharmacy merchant, we did not have a merchant account solution for him. Had he had six months of processing history, we feel we could’ve gotten an approval.
The conversation ended unhappily, but we’re not the type of merchant account provider that guarantees prospective merchants that we have solutions when we don’t. Today, this week, we are unable to help online pharmacy startups because our banking partners deem them too risky. In the business of e-commerce merchant account processing, that could change next week.
We suppose the prospective pharmacy merchant made a few more calls to our competing payment processors after hanging up with us. We hope that he received the same explanation.
“It doesn’t matter the industry in which a merchant is working or whether they’re looking for a domestic or offshore solution,” said Instabill Sales Manager Wendy Jacques. “If a merchant has never processed credit card transactions before, the acquiring bank will regard them as a startup.”
E-commerce merchant account processing solutions sparse for startup pharma merchants
We left that conversation wondering where the prospective pharmaceutical merchant goes from here, and we’re not certain. Unfortunately, the online pharmaceutical industry is one of those high risk-type industries that acquiring banks have grown wary of, and solutions – especially for startup merchants – have become sparse.
If we had the opportunity, the best advice we could offer was to keep processing transactions the way he had been and reconvene with payment processors in another 3-4 months.
Still, we encourage merchants of all risk types to contact us to have an initial conversation to discuss possibilities. After a few questions about your business, our merchant account experts will give a frank and honest assessment of the e-commerce merchant account processing solutions we have to offer.
We’re a phone call away at 800-530-2444.
