Why is my payment processor flagging my med spa?
Adding a telehealth program changes what kind of business you look like to your processor. A med spa selling in-person services was underwritten as a spa, and a telehealth program does not bill the same way. A telehealth program bills in ways your spa account was not written for:
- the same card is charged every month
- medication ships from a pharmacy instead of being performed in your treatment room
- the prescriber is someone you contract with, not someone you employ
- patients are treated in states where you have no location
Your merchant agreement covers the business you described when you signed up, and it does not cover this.
What does a prescription program change about your merchant account?
A weight loss or hormone program introduces:
- recurring charges to the same card every month
- every charge card not present
- tickets well above what a spa normally bills
- product shipped by a pharmacy instead of performed in your treatment room
- charges to patients in states where you have no location
Why does accepting cards today not protect you?
Your card terminal and your Stripe account were approved for the business you were already running. Neither was underwritten for a telehealth program.
You were coded and priced for what you described when you signed up. If that was "medical spa" or "salon and spa," running a different model through the same account breaks the agreement, whether or not the volume looks healthy. Underwriters treat undisclosed business lines as a serious issue on their own, separate from risk.
Processors can freeze funds while they investigate. Get a second account approved in advance so the program keeps running if that happens.
Which parts of a telehealth program look risky to an underwriter?
| What they see | Why it raises the risk score |
|---|---|
| Compounded medication | Pharmacy-shipped product is harder to reverse and harder to dispute cleanly |
| Recurring billing | Every renewal is another chance for a chargeback, and they compound silently |
| Card not present, always | No in-person verification, so cards are more often stolen or unfamiliar |
| Higher ticket sizes | A single dispute is a bigger loss |
| Patients in many states | More regulatory surface than the underwriter priced in |
| Free or discounted first month | Negative option rules apply, and consumers dispute them more |
Why does recurring billing catch most med spas?
One charge a month per patient looks small. Across a patient base your chargeback percentage rises, because renewal disputes are easy to file and hard to win when a patient says they forgot they were subscribed.
The card networks monitor dispute ratios and place merchants in monitoring programs when those ratios cross published thresholds. The first tier sits just under one percent of transactions, and the ratio counts transactions rather than patients. A patient on a monthly program generates twelve a year, so a small number of disputes moves the percentage quickly.
What should you do before you launch?
- Tell your processor what you are adding, before the first transaction. Ask whether your current agreement covers compounded medication and recurring billing.
- Get it in writing. A verbal "should be fine" from a rep is worth nothing later.
- Separate the billing. Run the program through its own account so a review on one does not stop the other.
- Set a real descriptor so patients recognize the charge. Unrecognized charges are the top source of disputes.
- Treat disputes as a process. Most chargebacks are won or lost on documentation and response time.
What should you do if your account is already under review?
Contact the processor rather than waiting. Ask what triggered the review, what documentation they want, and whether funds are held or only monitored.
If funds are held, get a second account approved before you need it rather than waiting for the review to finish.
Common questions
Can my med spa get a merchant account for telehealth at all?
Yes, but usually as a dedicated healthcare merchant account with real underwriting rather than a generic retail account. It takes longer and is priced to the risk.
Will a high-risk label follow me forever?
No. Low dispute ratios and clean documentation move you to better terms over time.
Is Stripe going to close my account?
Not automatically. Stripe and Square treat compounded medication and telehealth as higher risk, and accounts get reviewed when the charges do not match what the account was underwritten for. What you control is disclosure, clear billing and dispute handling.
Do I need LegitScript certification?
Yes. LegitScript certification is required for telehealth payment processing, so the account cannot be approved without it. It takes weeks, which makes it the first thing to start rather than the last.
Does using a compounding pharmacy make this worse?
It is one factor underwriters weigh, because pharmacy-shipped medication adds fulfilment and refund friction. Fast, clean refunds offset most of it.
Why did this not happen when I sold retail skincare?
Retail skincare bills like retail. One charge, in person, small ticket. None of the risk factors above apply.
How long does approval take?
It depends on how much documentation the underwriter wants. One complete submission is faster than answering questions across three weeks.
What if I operate in several states?
Disclose all of them up front. Multi-state programs get written. Discovering four undisclosed states does not go well.
What does adding a prescription program change?
It changes the business your account is processing for. The treatment side of a med spa takes money in person for a service performed then. A prescription program takes money for medication that ships, often on a repeating schedule. An underwriter wrote your account for the first business. The second one was never assessed.
Why does recurring billing cause most of the trouble?
A subscription charge is authorised once and processed many times. If a patient stops using the program and does not cancel, the next charge arrives as a surprise. Surprise charges become chargebacks, and a chargeback ratio above a threshold puts the whole account at risk. The fix is mostly product design: make cancellation obvious, send a reminder before each charge, and refund without an argument. Those three changes reduce disputes more than any pricing decision.
What does an underwriter want to see?
What the business sells, described plainly.. Every state it sells in, disclosed up front.. Who prescribes, and their licences.. Who dispenses, and their licences.. A refund policy and a complaint process.. Certification, where the processor requires it..
What does a reserve mean?
A percentage of each transaction is held for a set period, releasing on a schedule. It is a common condition on higher-risk accounts rather than a penalty. Price it into your margin, because the cash is delayed rather than lost.
How long does a new account take?
Longer than a retail account, and it depends on documentation completeness rather than on the processor's queue. One complete submission with certification attached moves faster than an application answered in stages.
What keeps an account healthy afterwards?
A dispute ratio kept low by clear policy rather than by argument.. Changes reported as they happen.. Certification renewed on time.. Documentation kept current, so a review is an email rather than a project..
Sources
Figures and rules on this page are checked against the primary sources below. Where a figure changes, the source is the current statement rather than this page.
- LegitScript, Certification. Certification as the route to accepting digital payments and advertising in regulated categories. Checked 20 September 2026.
- LegitScript, Healthcare Certification pricing. Application fee $975 per website, annual fee $2,150 per website, expedite and probationary fees. Checked 20 September 2026.