Why is the Nutraceutical Industry Classified as “High Risk” in the Banking World?

What is Nutra anyway?

Nutra products and natural remedies that offer health benefits without side effects will always be in demand and have a strong customer base across the globe. There will also constantly be many online providers of these Nutra products which creates a very competitive market for all involved. The term “nutraceutical” was coined in 1989 by Stephen De Felice, founder and chairman of the Foundation for Innovation in Medicine, an American organization which encourages medical health research. He defined a nutraceutical as a “food, or parts of a food, that provide medical or health benefits, including the prevention and treatment of disease”. The term “nutraceutical” is used to describe these medicinally or nutritionally functional foods. Nutraceuticals, which have also been called medical foods, designer foods, phytochemicals, functional foods and nutritional supplements, include such everyday products as “bio” yoghurts and fortified breakfast cereals, as well as vitamins, herbal remedies and even genetically modified foods and supplements.

Why are Nutra Accounts considered High Risk?

Many different terms and definitions are used in different countries, which can result in confusion. It can be difficult for merchants to find a bank or processor to work with, and the need to go with a merchant processor that specializes in high risk industries has become a necessity. So why do your traditional big banks like to stay clear of the nutraceutical industry and often turn down what they consider high risk industries like nutraceuticals? Why is it that your nutra business which sells tangible products such as protein powders, herbs and sleep alternatives so frowned upon? The answer lies within the expectation of these products, each consumer could receive a different outcome than what was expected. Say one consumer purchases a diet product that promises “Lose seven pounds in seven days”, the expectation is set from the start as to how much weight will be lost. If that number is not attained (even though there are many variables in play) the consumer has the right to say this specific nutraceutical product did not work “as advertised” and either ask for a full refund, or worse file a chargeback. Banks, merchants and everyone involved dislike chargebacks for obvious reasons. Chargebacks and returns are the biggest reason Nutra products fall under the high risk merchant account category.

Why Should You Choose Double Helix Processing?

We understand the unique needs of the different Nutraceutical and related business types and have established numerous acquiring banking relationships to become your best resource in getting nutraceutical merchant accounts set up and accepting online payments. Our expertise is your ticket to getting the stable processing you need to further grow your business.

Since finding a provider who is both experienced and dependable isn’t always easy – Underwriters often ask for proof of where the products are sourced, quality testing samples and much more. Double Helix Processing can assist in getting a package together to present to the bank so your account gets setup as quick and seamless as possible.