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Understanding Drug Merchants

The pharmaceutical industry is probably one of the most regulated sectors on account of public safety. What drugs, health-related products and cosmetics merchants are allowed to sell, how, to whom and where are tightly regulated by law. However, the internet as a sales channel is not.

Unscrupulous merchants exploit the complexities of selling drugs online, especially with changes in the law around cannabidiol (CBD), to circumvent legal, scheme or acquirer requirements to secure an acquiring contract. The downstream impact for acquirers and payment service providers can be significant, resulting in revenue loss, customer churn and disputes

This entry-level course is designed to provide a good grounding in drugs and pharmaceuticals, including CBD/THC sales. It covers some of the most common pitfalls for merchant acquirers, plus how to mitigate the risks. Packed full of real-life case studies and practical advice, this stand-alone course is ideal for those working in risk management or compliance at acquirers or payment service providers.

Learning Objectives:

  • Understand why the drug sector is high risk and high brand-risk
  • Be able to set drugs in their regulatory and legislative context
  • Know card scheme requirements around drugs, including CBD/THC
  • Understand how to manage the risks of drug merchants for business success

Chapter 1 - Introduction to Drugs & Pharma

10 Lessons 30 minutes
  • We cover the historical background to narcotics legislation and pharmaceutical regulation in the main markets worldwide. This takes in the 1970s War on Drugs in the US, the birth of anti-money laundering regulation, originally designed to tackle the abuse of the global financial system by drug cartels, and the growth of online drug sales and legal highs.

Chapter 2 - Why are Drugs and Pharmaceuticals High Risk?

13 Lessons 30 minutes
  • A deep-dive into why the drugs sector pose such high risks for acquirers. We cover everything from the products to the regulation, online sales channel and deceptive marketing practices sometimes deployed by unscrupulous operators. The overlap with the nutraceutical, weight loss and cosmetics sectors and the degree to which they are high risk is also covered.
  • Includes real-life case studies of the most common scams and practical advice for merchant underwriters on how to spot potential rogue operators.

Chapter 3 - Card Scheme Rules

6 Lessons 10 minutes
  • Everything you need to know about registration on the card schemes’ high brand-risk programmes, plus the lowdown on requirements for acquiring drugs merchants.

Chapter 4 - How to Manage Drug Merchant Risk Exposure

10 Lessons 30 minutes
  • Everything from how to conduct KYC on drug merchants to reviewing business operations, legal opinions, marketing materials and web traffic to manage your risk exposure. Monitoring recommendations are also covered.

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