High Risk Merchant Handbook

Nutraceutical Payment Processing

Visa and Mastercard have their own rules for supplement sellers. Learn the MCC codes, registration steps and trial disclosures before you apply.

Why nutraceuticals draw network scrutiny

Visa has rules for products that sound like drugs. Visa's rules cover products that claim or imply effects similar to prescription drugs, controlled substances, or street drugs. Visa says this applies even if the product is claimed to be legal. Nutraceutical payment processing starts with these rules.

Some products are barred outright. Visa's guide says payments involving the sale of illegal narcotics, recreational drugs, or designer drugs are strictly prohibited from entering the Visa payment system. The same guide says facilitating transactions for illegal pharmacies could expose participants to litigation, prosecution, and financial risk.

So the network is not asking whether your lawyer says the product is fine. It is asking whether your marketing sounds like a drug claim. That is why your product claims matter.

Getting the MCC right

The merchant category code tells the network what you sell. Visa and Mastercard each define these in their own manuals.

Visa's Merchant Data Standards Manual says MCC 5122 covers business-to-business or wholesale distributors of prescription drugs, pharmaceuticals, and related products. Visa's manual says MCC 5912 covers drug stores and pharmacies that sell prescription and proprietary drugs.

Mastercard's rules say an acquirer must identify non-face-to-face pharmaceutical wholesale transactions using MCC 5122 and TCC T. Mastercard's rules say an acquirer must identify non-face-to-face pharmaceutical retail transactions using MCC 5912 and TCC T.

Do not pick a friendlier code to dodge the rules. Miscoding hides what you sell from the network. If your products fit a pharmaceutical code, use it and meet the rules that come with it.

Mastercard's registration requirement

Mastercard's manual sets additional requirements for pharmaceutical and tobacco product merchants. Mastercard requires non-face-to-face pharmaceutical merchants with MCCs 5122 and 5912 to register.

Mastercard's rules say an acquirer must register a merchant with Mastercard before acquiring non-face-to-face pharmaceutical or tobacco transactions. So if you sell online under MCC 5122 or 5912, the acquirer must register you with Mastercard first.

Subscription and trial sales

Free trials and monthly bottles have their own rules. Both networks have rules aimed at them.

Visa's rules cover up-selling and negative option merchants in section 5.8.17. A negative option means the customer's silence counts as approval to keep charging. The customer must cancel or opt out to stop the charges.

Visa's rules include a table of required disclosure, transaction receipt and notification content and format for negative option transactions. Visa's rules say merchants offering negative option transactions must disclose the merchant name and a description of the goods and services.

Visa's rules say the required disclosure must state the length of any trial period, introductory offer, or promotional period. Visa's rules say the disclosure must include the transaction amount and transaction date for the initial transaction and any subsequent recurring transactions.

Visa's rules say a recurring transaction must include the fixed dates or intervals on which the transactions will be processed.

Mastercard has its own checks. Mastercard recommends that acquirers in the Europe Region perform checks on merchants doing recurring payment transactions. Mastercard's manual says these recurring payment checks are meant to reduce cardholder complaints about deceptive subscription billing practices.

Mastercard's manual says acquirers should verify payment pages correctly display the terms of the recurring payment without using small print. Mastercard's manual says a trial period is a preset length of time during which the Cardholder may evaluate the characteristics of the physical product.

Mastercard also has a registration for this model. Mastercard requires negative option billing merchants selling physical products with MCC 5968 to register. Mastercard's manual says an acquirer must use MCC 5968 and TCC T to identify all non-face-to-face negative option billing transactions.

Visa's manual says MCC 5968 merchants sell subscription products for delivery via direct mail, email, apps, or salespeople.

Cancellation and disputes

Visa's guide says sellers using free trials must follow Visa Rules on disclosing terms, getting cardholder consent, and offering a simple way to cancel.

Recurring charges also need an easy way to cancel. Our page on the subscription merchant account covers what Visa asks for.

Disputes follow the same path. Visa's rules include Dispute Condition 13.2 for a cancelled recurring transaction. It covers a recurring charge the customer had cancelled.

What not to do

Visa's guide says illicit businesses commonly use transaction laundering for illegal gambling, illegitimate online pharmacies, illegal drugs, and counterfeit merchandise. Transaction laundering means running your sales through someone else's clean-looking account.

Counterfeits are in the same guide. Visa's guide says counterfeit goods span industries including media, apparel, accessories, electronics, pharmaceuticals, and medical devices.

Do not hide the real business model. Mastercard's manual says the acquirer of a negative option billing merchant must monitor authorization transaction messages.

How to prepare before you apply

Get your setup right before you talk to any processor:

  • Write your product claims so they do not sound like drug claims. Have a lawyer review them.

  • Match your MCC to what you actually sell. Do not pick a code to dodge a rule.

  • If you run trials or subscriptions, build the checkout page to Visa's disclosure table. Show the merchant name, the product, the trial length, the amounts, and the charge dates.

  • Put a working cancel link on the page. Test it yourself.

  • If you sell by phone too, read up on billing authorization for phone sales.

    See why banks watch processor accounts to learn more.

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