The online pharmacy sector is experiencing rapid growth, leading to an increased demand for dependable payment processing solutions. However, this industry is often deemed high-risk by numerous financial institutions and banks, posing a challenge for both new ventures and expanding businesses in this domain.

This article discusses the details of the online pharmacy industry, shedding light on the factors contributing to its basic structural understanding of why it’s considered a high-risk by banks and financial institutions. Additionally, it explores potential payment processing alternatives suitable for businesses operating in this sector. By gaining insights from this discussion, you can make a well-informed decision regarding the most suitable solution for your business.

Online Pharmacy: Understanding The Structure

The advent of the Internet has transformed how products are marketed and sold, including pharmaceuticals. Online pharmacies, also known as Internet pharmacies, have emerged as a prominent response to this digital shift. These platforms facilitate the sale of medicines, both prescription and non-prescription, over the Internet. Statistics suggest that about 1 in 6 US consumers have procured pharmaceutical drugs online.

The popularity of online drug sales has surged due to the typically lower prices offered by these virtual pharmacies. However, it’s imperative to uphold stringent standards to ensure the maintenance of health regulations and the ethical obligation to deliver optimal care to patients.

But Why Do People Prefer Online Pharmacies?

Research has indicated that even prescription drugs are accessible online without a proper prescription. There are many reasons why individuals are attracted towards this unconventional method of getting their genuine need for prescription medication. They avoid the conventional way of visiting a doctor’s office and having it filled at the local pharmacy? 

The traditional process is perceived as more expensive and cumbersome compared to the ease of purchasing the same medication online. Some users felt that the medical system was less responsive to their dosage requirements. Anonymity was also a significant consideration for many. This even led to the industry gaining a negative reputation and facing the risk of being universally classified as high-risk by merchant processors and banks.

Current Scenario And Trends Of Online Pharmacies

In recent times, healthcare solutions, such as online pharmacies, have initiated a profound transformation in the way consumers interact with and oversee their medication, ushering in an era of unparalleled convenience, accessibility, and efficiency. Research highlights the growing acceptance of online platforms for medication needs, with nearly two-thirds of baby boomers and seniors actively engaging in digital healthcare activities over the past year.

Moreover, a significant portion of consumers has expressed interest in leveraging these platforms, with 9 out of 10 individuals favoring their use for critical healthcare tasks. Notably, consumers display a strong inclination towards adopting unified digital healthcare platforms for specific prescription-related activities. In this context, baby boomers and seniors exhibit heightened interest compared to their younger counterparts in various categories.

For instance, an impressive 90% of baby boomers and seniors express a preference for refilling prescriptions through digital platforms, while 87% opt to use such platforms to enable doctors to send prescriptions electronically. The data further indicates that nearly 80% of consumers with even a mild interest in utilizing unified digital healthcare platforms favor the availability of online pharmacies through these platforms, underscoring the growing integration of digital solutions in the future of medication management.

Looking forward, there is a strong consensus that the convenience, accessibility, and efficiency introduced by online pharmacies with payment processors opening to this new trend. Online pharmacies will continue to reshape the landscape of medication management. 

Benefits Of Online Pharmacies 

In addition to the conve­nience of home de­livery for medications, online pharmacie­s can provide similar services to in-store­ options. This includes access to license­d pharmacists who can answer any questions you may have re­garding your medications.

In a rece­nt survey, around 25% of respondents ide­ntified enhanced acce­ssibility as the primary advantage of online pharmacie­s. Unlike traditional retail pharmacies, online­ platforms offer convenient and e­asily accessible service­s at your fingertips, without limitations caused by distance or ope­rating hours. Additionally, 23% and 10% of participants mentioned convenie­nce and cost reduction for patients as significant be­nefits respective­ly.

Here are some benefits of using an online pharmacy:

• Ordering pre­scription drugs from an online pharmacy is incredibly convenient, especially for individuals who live far from a brick-and-mortar pharmacy or those­ with limited mobility. It’s also advantageous for the e­lderly and people with busy sche­dules. Additionally, shipping costs are significantly lower compared to the expenses of traveling to a physical pharmacy.
• One of the biggest benefits of online pharmacy services is the time saved. You can easily place an order for your medication in just a few minutes and have your prescription drugs delivere­d promptly. There’s no need to make a trip to the physical pharmacy or wait in long lines.
• Buying drugs online can be a cost-effective option, potentially saving you up to one-third of the total cost. Research indicates that purchasing medications through online channe­ls can yield significant savings.
• Online pharmacy services provide the additional benefit of privacy and confidentiality. This can be particularly advantageous for individuals who may feel uneasy discussing personal matters in person with doctors and pharmacists. It allows people to discre­etly order medications, avoiding any discomfort that may arise from sensitive topics such as sexual health or adolescent concerns.

Drawbacks Of Online Pharmacies 

Consider these drawbacks associated with online pharmacies:

• Inability to accommodate urgent prescription needs: Online pharmacies may not be suitable for patients requiring immediate medication. Unlike traditional pharmacies, they may not have the option for same-day prescription fulfillment.
• Lack of physical interaction: A major setback is the absence of face-to-face interaction with pharmacists, particularly impacting seniors who prefer in-person consultations and preventative health services like flu vaccinations, which are not available through online platforms.
• Requirement of technical proficiency: Some individuals who are less familiar with technology may encounter challenges while creating an account and uploading their prescriptions, often necessitating external assistance.
• Potential for unethical practices: Certain illegal online pharmacies distribute medications without demanding a prescription, leading to unregulated medication distribution and posing health risks to patients.

Why Online Pharmacies Face High-Risk Classification?

In the United States and the United Kingdom, pharmaceutical trade is known for its high costs. Offshore trading allows merchants to optimize their profits, making it the preferred choice for many online pharmaceutical providers.

The majority of online medicine retailers operate from foreign countries, contributing significantly to the classification of online pharmacies as high-risk businesses. Credit card processing providers often encounter challenges in accommodating high-risk enterprises like pharmacy merchants, even though this sector represents one of the most profitable online services today. 

That is why, despite the increased profit potential for online pharmacies, numerous banks routinely reject their applications for pharmacy merchant accounts, citing the inherent high-risk nature of their business.

Payment Processing Solutions For Online Pharmacies

Over the years, online pharmacies have undergone significant transformations, continually adapting to meet the diverse needs of their patients. One area that has witnessed substantial changes in the way these businesses handle payment processing.

Traditionally, online pharmacies relied on standard merchant accounts for processing credit and debit card payments. However, due to the high-risk nature of the industry, these accounts often came with exorbitant fees and rates. As a result, many online pharmacies struggled to maintain profitability, leading some to cease operations entirely.

Fortunately, the landscape has shifted, and there are now alternative payment solutions tailored specifically for high-risk businesses such as online pharmacies. These specialized solutions offer significantly reduced fees and rates, serving as a game-changer for companies operating in this sector.

Consider these options for seamless payment processing in the online pharmacy industry:

• Instabill: In partnership with select providers, Instabill offers a specialized payment processing solution tailored for licensed and certified online pharmacy merchants who encounter challenges securing merchant account approvals.
• Opayo: Formerly known as SagePay and renowned in the realm of online payments, Opayo stands as a highly dependable online payment solution, well-suited for pharmacies seeking a reliable payment processing system.
• QuadraPay: With pharmacy merchant accounts starting at 2.99%, QuadraPay provides a trustworthy and reliable option for online pharmacies looking for efficient and cost-effective payment solutions.

Top 5 Reputed Online Pharmacies

Source: Statista – Leading online pharmacies ranked by brand awareness in the United States in 2022

Here are some of the most reputable online pharmacies where you can find the medications you need, ensuring safety and reliability:

1. Amazon Pharmacy

Amazon’s pharmacy services follow the Prime philosophy, providing cost-saving benefits for Prime members, along with free, speedy two-day delivery. With a commitment to transparency, Amazon ensures no surprises during the purchase process, offering 30-day and six-month supply options for refills. 

Additionally, it collaborates with prescribers and insurance companies, providing access to round-the-clock pharmacist assistance for any inquiries.

• Express Scripts

With Express Scripts, you can access pharmacists and customer service representatives at any time for health and insurance-related queries. Notably, they offer a $0 copay on preventive medications and provide tailored suggestions to help you reduce expenses on regular prescriptions. 

It’s important to note that this service is exclusively accessible to individuals with pharmacy benefits from Express Scripts, which might be included in certain health plans or employer benefits.

• BlinRx

BlinkRx is a digital pharmacy that collaborates with 35,000 other pharmacies nationwide, allowing customers to either have their medications delivered to their homes or pick them up in person. The company asserts that it offers the most competitive prices on medications by assessing your insurance, copay, and deductible to determine the most cost-effective option for filling your prescriptions. 

Opting for home delivery incurs no delivery charges, and Blink Health also provides online doctor consultations for specific conditions, enabling you to receive medications without a prescription from your doctor.

• CaryRx

CaryRx is a mail-order pharmacy that operates as a fully licensed and nonprofit organization, catering to individuals who meet specific income criteria, set at or below 400% of the federal poverty line. 

Prospective clients can verify their eligibility conveniently online. Notably, Rx Outreach does not impose any membership fees and primarily provides generic medications for chronic health conditions. Moreover, it offers a limited quantity of complimentary medications each month, distributed on a first-come, first-served basis via a monthly email newsletter.

• OptumRx

OptumRx presents a beneficial solution for individuals subscribed to Medicare Part D plans administered by Optum. By utilizing OptumRx, members can conveniently save both time and money, avoiding the hassle of waiting in long lines at their local pharmacies.

Conclusion

The digital pharmacy sector is burgeoning, creating a demand for secure payment solutions. Despite its growth, online pharmacies face challenges due to their classification as high-risk businesses, leading to difficulties in securing merchant accounts. However, specialized payment processors like Instabill, Opayo, and QuadraPay offer tailored solutions, enabling smooth operations for these ventures.

Frequently Asked Questions