Why Nutraceuticals businesses are considered High-Risk?

Strict Regulations

  • Nutraceuticals are subject to strict regulations, and non-compliance can result in legal trouble.
  • The FDA regulates the marketing and labeling of dietary supplements in the United States.
  • Merchants must carefully scrutinize their products and labels to ensure compliance with all regulations.

False Claims

  • Nutraceuticals are often associated with false claims, which can damage the reputation of the merchant and the product.
  • Some nutraceuticals may not have sufficient scientific backing to support their claims.
  • Merchants must avoid making false or exaggerated claims about the benefits of their products to avoid legal and reputational damage.

High Risk Merchant Category

  • Nutraceuticals have a high potential for chargebacks and fraudulent activity.
  • Merchants must ensure that their payment processing systems are secure.
  • Merchants must have robust fraud prevention measures in place to minimize the risk of chargebacks and fraudulent transactions.

Mitigation measures for Nutraceuticals merchants to reduce risks when selling online

  • Ensure Compliance: Merchants should ensure that their products and labels comply with all relevant regulations, including those set forth by the FDA. This will help minimize the risk of legal trouble and fines.

  • Verify Claims: Merchants should ensure that all claims made about the benefits of their products are supported by scientific evidence. This will help minimize the risk of reputational damage and false advertising claims.

  • Robust Fraud Prevention: Merchants should implement robust fraud prevention measures to minimize the risk of chargebacks and fraudulent transactions. This can include using a payment service provider with advanced fraud detection technology, implementing 3D Secure authentication, and setting up transaction monitoring systems.

  • Secure Payment Processing: Merchants should ensure that their payment processing systems are secure and compliant with industry standards such as PCI DSS. This will help minimize the risk of data breaches and other security threats.

  • Find a Payment Service Provider: Merchants can work with a payment service provider that specializes in high-risk merchant accounts, such as nutraceuticals. These providers often have expertise in managing the specific risks associated with this industry and can offer tailored solutions to help merchants reduce their risk exposure.

Being a high-risk merchant vs. a regular merchant

  • Higher payment processing fees
  • Lengthier application process
  • Higher chargeback fees
  • Cash reserve requirments:
    • Capped reserve
    • Rolling reserve
    • Upfrom reserve
  • Volume caps
  • Additional technical requirements
  • Being on the TMF / MATCH list


Check out our knowledge hub to learn more about what processing fees, application process, chargebacks and cash reserve requirements or TMF / MATCH list mean. 

Other risk factors?

There may be other risk factors as to why you as a Nutraceuticals merchant are classified as a high-risk merchant, such as:
  • Accepting subscription-style payments

  • Being on the Member Alert to Control High-Risk Merchants, or MATCH list — a list managed by Mastercard that monitors merchant behavior, like chargeback history

  • High average transaction sizes

  • High sales volumes

  • Highly regulated industries

  • International sales

  • Large number of card-not-present transactions

  • Little to no business experience

  • Long fulfillment time frames

  • New or poor credit scores

  • Past fraud or illegal activity

As high-risk Nutraceuticals merchant how to find a payment provider?

It takes effort for businesses to secure a payment processing partner when they are considered high-risk but it is definetly possible to find the right payment solution if you focus on:

  • Maintaining healthy cash levels. Most processors would like to see a healthy cash level in your business bank account. 
  • Try to reduce chargebacks. There could be a number of factors behind the soaring number of chargebacks in your business. Whatever the reasons may be, you can always analyze them and try to reduce your chargebacks.
  • Be transparent. Disclose all materials and relevant information during the application process. Payment processors may ask you for very detailed information about your business and finances. Be open, honest, and transparent.
  • Keep your documents ready. This could mean having six months of bank statements and a few years of tax returns. That said, each processor has its own set of requirements so make sure to check them.
  • Follow the guidelines of your payment processor. When you apply for a high-risk payment solution, besides your business needs, the risk the payment solutions provider takes also matters. So, be flexible and see if there are things you can do to reduce your risk by discussing with them and following their recommendations.

Our Platform will find the right payment solution for your business

Our biggest differentiator? 

We provide payment solutions for merchants with a 90% Succes Rate by Algoritmic matching and pre-KYC onboarding in each industry and region globally.