Nurturing the Nutraceutical Industry Through Payments
Nutraceuticals is a broad umbrella term that is used to describe any product derived from food and or natural sources that provide both nutrition and medicinal benefits. There is no globally-accepted definition for what a nutraceutical is, therefore definitions, attitudes, and legislation around nutraceuticals tend to vary from country to country.
The industry encompasses three main segments which include functional foods, dietary supplements, and herbal/natural products.
For a product to be considered a nutraceutical, it must:
Be derived from a food source
Offer additional health benefits beyond general, basic nutrition
The philosophy behind nutraceuticals is to focus on prevention, according to the saying by a Greek physician Hippocrates (known as the father of medicine) who said “let food be your medicine”.
As consumers continually want to experience the feeling of ownership over their own health, they're constantly looking for new and alternative ways to be healthy and achieve overall wellness.
The United States nutraceutical market still represents the largest nutraceutical market in the world but is still largely unregulated, as they exist in the same category as dietary supplements and food additives by the FDA. According to this report, the U.S. nutraceutical market is forecasted to reach USD 133.4 billion by 2025.
The global nutraceutical market size is projected to reach USD 722.49 billion by 2027, expanding at a CAGR of 8.3% over the forecast period while Asia-Pacific is expected to witness the fastest growth over the same forecast period.
Why Categorize Nutraceuticals as High-Risk?
Despite the growing demand for holistic and natural forms of healthcare, many banks and payment processors are still wary to take them on due to:
Customers may initiate chargebacks/disputes because they feel the product does not result in the advertised benefits (but what about pharma?)
Still being highly unregulated, there is room for companies to incur legal action for false claims or misleading advertising
Companies who offer their products as part of a subscription service that have automatic payment renewals, which result in a large volume of disputes
Perceived “reputational risk” in which most traditional providers are extremely conservative and don’t want to be associated with anything that even might be controversial now or in the future (ie. food scandals and merchant scams)
Lack of ingredients transparency and accurate labeling
The nutraceutical industry continues to have room for growth. The online retail segment is expected to grow at a faster pace compared to other distribution channels because of lower prices, extensive product range, convenience, free shipping, etc.
The nutraceuticals industry represents a highly competitive landscape. If you want your business to compete with key players and dominate the nutraceutical market space, focusing on various strategic initiatives, including mergers & acquisitions, product innovation, portfolio expansion, and alternative payment methods will keep your business on top.
If legitimate nutraceutical businesses who want to accept credit card or alternative payment methods fall in any of these categories, you can rely on us to get your merchant account quickly and efficiently.
Cosmetics, such as anti-aging skin products
Personal Care Products
Nutraceuticals for Pets
On-the-Go Snacking/Food Products
Dietary Supplements, from tablets to gummies
Beverages, such as health and energy drinks
And many others
The success of any high-risk industry hinges on acquiring a merchant account quickly and getting the best rates customized for your business. Your journey starts here.