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E-Commerce Payment Providers are at Risk from the Trendy Drug Demand

online pharmaceutical sales

During the 2023 Oscars ceremony, host Jimmy Kimmel joked, “When I look around at this room, I can’t help but wonder, ‘Is Ozempic right for me?'”

Kimmel’s joke touched upon a reality which extends beyond Hollywood to merchant portfolios. The demand for trendy drugs like Ozempic is a growing problem with serious risks — not just for the users who face the potential health implications — but for the payment providers who bear the financial consequences of this rapidly growing segment of illegal transactions.

G2, a payments intelligence company, found that the trending drugs were driving up payments risks in its review of over 6.6 million websites and 4 billion web pages.

Industry experts estimate that between 30,000 and 40.000 illegal online pharmacies are active at any one time. These bad actors sell prescription-only medicine — including controlled substances — without requiring a prescription.

Payment providers pay fines, not the criminals. More than 40% of assessments in North America are pharma-related, with fines ranging from $25,000 up to $150,000.

Here are four payment providers that should be paying close attention to the risk of in-demand drugs in 2023:

1. Semaglutide

Semaglutide, the active pharmaceutical ingredient in U.S. Food & Drug Administration (FDA)-approved In 2023, prescription drugs like Ozempic Wegovy and Rybelsus gained enormous popularity as weight loss drugs. The celebrity endorsements have captured the public’s attention and increased demand from average citizens.

On e-marketplaces and social media platforms as well as illegal pharmacy websites, fraudulent merchants sell this product without prescription. Semaglutide may also be marketed on websites selling unapproved drugs, such as those that sell “peptides” or “GLP-1”. Payment providers should ensure that merchants are authorized to sell the compound, whether in the form of tablets or sublingual semaglutide.

2. Apetamin

Apetamin contains cyproheptadine – a prescription antihistamine which increases appetite, and leads to weight gain. Apetamin, a prescription-only antihistamine, is produced overseas by manufacturers who then import it illegally into the U.S.

Apetamin is often advertised on beauty websites as “vitamin syrup” and sold via social media to individuals who are looking for a “thick, slim” physique.

The FDA will be holding its April meeting. warned consumers Apetamin can cause serious side effects, such as convulsions and hallucinations. It can also lead to coma or even death.

3. THCO

Sites that offer hemp-derived compounds, such as CBD and delta-8THC, may also sell TCHO, which is a psychoactive synthetic cannabis compound.

The U.S. Drug Enforcement Administration’s (DEA) February report was released. asserted THCO occurs naturally only in hemp plants and not in cannabis.

THCO is not a hemp-derived cannabis cannabinoid. Therefore, it is classified as a Schedule I controlled drug in the U.S. Buyers who onboard CBD vendors should make sure that these merchants do not sell THCO.

4. Xylazine

Dealers are increasingly turning to Xylazine – a prescription only large animal tranquilizer – as a cutting substance for street drugs such as heroin and fentanyl in the U.S. Drug mixtures containing fentanyl and xylazine put users at risk of death. According to the DEA there has been a dramatic increase of xylazine related overdoses in the U.S. from 2020 to 2021.

The U.S. Congress has recently introduced the Combating Illicit Xylazine Act To deal with this growing problem. If this law is passed, it will greatly increase penalties for the illegal use of this substance. While authorized retailers like veterinary pharmacies can still legally sell Xylazine, some websites that offer illegal drugs list it as “research chemicals.”

Payment providers’ role in combating illegal pharma sales

It is notoriously hard to enforce drug laws online.

In the U.S. law enforcement agencies like the Department of Justice and FDA place pressure on third party intermediaries under their jurisdiction. These include payment providers who may unknowingly facilitate these illegal transactions. The financial consequences of a criminal prosecution can be severe. Financial institutions may also suffer significant reputational harm.


Payment providers face a greater level of risk than most people realize, because merchants who violate federal law will try to conceal their illegal drug offers. Payment providers can follow these steps to remain in compliance with federal law and avoid card brand fines. They will also keep their reputations intact.

Complete Up-Front Assessments of Risk During Merchant Onboarding

Payment providers are under pressure to board new merchants quickly — in near real-time — to avoid losing to the competition. Payment processors are granting merchant accounts in minutes. This puts extreme pressure on competitors to accelerate.

Payment risk experts are able to collect and analyze data in order to predict a merchant’s behavior for the next year. Payment providers can use the risk score to determine whether or not the level of risk is acceptable, and then set fees that are risk-adjusted.

Automate Know Your Customer (KYC) Due Diligence

Payment providers that want a fast, accurate and efficient KYC check will find automation to be a great friend. Manual KYC is the most inefficient, expensive, and inconsistent part of the merchant’s underwriting process. This leaves room for missing important red flags.

KYC automatism can verify merchant information in just minutes, and provide additional relevant details to help make informed decisions.

Conduct Ongoing Merchant Monitoring

Payment providers should consider that the risk in their merchant portfolios is dynamic and always changing. Over time, merchants may change their business activities and drastically alter the risk profile.


It is possible that bad actors use a front site to gain merchant accounts. Only after a thorough investigation can you find out if there are any suspicious transactions or patterns.

Payment providers who are constantly monitored can take action quickly. This is an important factor, as many fines or assessments are based on the time period of the infraction.

You can also read our conclusion.

Payment providers have a major role to play in combating a serious global issue. This is not just about immediate compliance or financial penalties.

By monitoring and acting on drug-related risks, financial institutions can protect their customers’ well-being as well as the integrity of the wider financial system.

By being vigilant against illegal attempts to profit from the high demand for drugs, providers are able to protect themselves while making a positive social contribution.