Main Subject - Internet and Businesses Online

You just obtained a merchant account at a quoted discount rate of 1.79% for your store. But, lo and behold, when your account statement for your first month's processing arrived, you discovered to your dismay tha

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

t many of your customers' transactions were processed at a much higher rate than the one quoted to you. Not a pleasant surprise.

You are not alone. In fact, we bet the majority of merchants don't really understa

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

d how merchant account discount rates are applied and calculated.

So let's see if we can shed at least a little light on what's happening here.

A Discount Rate is a charge that is levied on each transaction you

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

process through your merchant account and is calculated as a percentage of that transaction's dollar amount.

The Discount Rate that most applicants are quoted when searching for a credit card processing solution

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

is what is known as the Qualified Rate. Your processing company determines the Qualified Rate by initially looking at the InterBank Exchange rate that VISA and MasterCard levy - this InterBank Exchange fee charge

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

by the credit card companies is the same for all banks and processing companies. The banks and processors then add on a further percentage to that fee (this is part of the profit they make) to determine the Qual

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

fied Rate they charge to their merchants.

In the case of a retailer, the current Qualified Rate is in the 1.70% to 1.85% range - and for phone and mail orders, as well as easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

nt-account-explorer.com/internet-merchant-accounts.php">internet processing, the range is commonly 2.25% to 2.49%. The latter range is higher because of the fact that in those types of transactions, the merch

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

nt does not have the customer's physical credit card present - so the risk of fraud is greater than it is for retail 'card present' sales.

So far so good - most merchants understand things to this point. But the

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

e are certain risk factors that can cause your transaction to be levied with an additional percentage charge. These surcharges are extracted on 'Mid Qualified' and 'Non Qualified' transactions. The surcharge for

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

id Qualified transactions is usually in the .75% to 1.25% range and for Non Qualified is generally 1.50% to 2.00%. Remember, these are charges on top of the standard Qualified Rate.

So what are the most common c

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

rcumstances when either Mid or Non Qualified surcharges may apply?

* Mid Qualified: (a) for phone and mail order as well as internet transactions, where there is no AVS (address verification) match; and (b) wher

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

a retail merchant manually keys-in the transaction because the credit card is present but cannot be swiped, or keys in an order where the card is not present (e.g. a phone order).

* Non Qualified: (a) for phone

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

and mail order and internet sales, where the transaction is keyed-in but is not part of a daily batch out of that day's transactions. (Note: where a person keys in his information on a website, the large majority

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

of gateways do the 'batching' automatically. Therefore for internet processing, this is not generally a concern); (b) where a retail merchant doesn't batch out daily; or (c) where the transaction is made utilizi

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

g a corporate, a non-U.S., a business or a government credit card.

So, if many of your customers reside outside of the United States, or use corporate, government or business cards, you can do yourself a big fav

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

r by negotiating as low as possible Non Qualified Discount Rate.

Unfortunately, there are another fifty or so other factors that can affect the discount rate you'll be charged (no-one said it would be easy to un

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

erstand all this!). These include:

* high risk merchants can expect higher discount rates across the board

* V

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

sa Signature Reward Cards and MasterCard World Cards have surcharges applied

* if the customer's order is not shipped within 24 hours, a surcharge may be levied

The bottom line? Prior to signing on for your mer

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

hant account make sure that you carefully read the provider's complete array of criteria for evaluating what discount rate will be applied to a particular sale. And speak with your agent if you have any questions

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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You know the routine. You've hired an eager individual willing to come onboard and learn the business. You've taught them, trained them, worked hand in hand and side by side for 2 solid years. Then all of a sudden your employee quits for no apparent reason. To your disbelief and utter amazement, you realize that you have just wasted the last 2 years of your life. A week or so goes by and you learn that your former employee has started a similar business and there's nothing you can do to stop them. Or is there?

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