The healthcare and telehealth industries are experiencing explosive growth, creating immense opportunities for payment companies and agents. However, with great opportunity comes great complexity, particularly in risk management and compliance. In a recent webinar hosted by LegitScript, industry experts discussed how payment providers can navigate the regulatory landscape and unlock growth potential in the telehealth space. Read a summary of the key takeaways, then watch the full session on demand.
The Telehealth Boom: A Massive Growth Opportunity
Telehealth, encompassing online pharmacies, digital healthcare providers, and niche startups specializing in areas like weight management and skin care, is one of the fastest-growing industries. According to Allied Market Research, the telehealth sector is projected to grow at a staggering 25.7% compound annual growth rate (CAGR) from 2024 to 2032, expanding from a $108 billion market in 2023 to $851 billion.
The med spa industry, a related sector, is also on the rise, with forecasts predicting growth from $22 billion in 2024 to nearly $84 billion by 2033.
With such promising numbers, payments companies must strategically position themselves to serve this evolving market. However, the high level of regulation and jurisdictional complexity in healthcare make this a challenging endeavor.
The Compliance Challenge for Payments Companies
Despite the opportunity, many payment service providers hesitate to engage with telehealth merchants due to the regulatory risks. Failure to comply can lead to legal consequences, card brand fines, merchant account closures, and even consumer harm.
Key compliance challenges include:
- Monitoring evolving state,federal, and international telemedicine laws
- Identifying non-compliant or fraudulent merchants, such as those transaction laundering, selling counterfeits or unapproved drugs, or disguising prescription drugs as research chemicals
- Staying updated on emerging product trends like GLP-1 weight loss medications, whose sharp demand has driven new opportunities but also prompted shifting regulations that have made the market complex
The Role of LegitScript in Risk Management
LegitScript provides merchant monitoring and certification solutions to help businesses demonstrate compliance and mitigate risk. By working with payment processors, banks, and healthcare merchants, they ensure that only legitimate, ethical, and legally compliant businesses are approved for payment processing.
Why LegitScript Certification matters:
- For payment processing underwriters, it streamlines onboarding and allows them to confidently approve merchants.
- For payments risk and compliance teams, it ensures businesses stay compliant as regulations change through LegitScript’s ongoing monitoring.
- For merchants, it unlocks access to advertising and marketing channels that require compliance verification.
EMS and Payment Cloud’s Success in Telehealth Payments
EMS (Electronic Merchant Systems) and Payment Cloud have been pioneers in providing payment solutions for high-risk industries like telehealth. By partnering with LegitScript, they have developed a streamlined approach to onboarding and maintaining compliant merchants.
Key success factors include:
- Utilizing LegitScript’s certification to fast-track merchant approvals, reducing wait times from eight weeks to about 48 hours
- Implementing stringent know your customer (KYC) and underwriting checks to prevent fraud
- Maintaining strong relationships with sponsor banks to ensure telehealth businesses remain stable and operational
Emerging Trends and How to Stay Ahead
The rapid expansion of telemedicine and new pharmaceutical trends require payment providers to be proactive. The rise of GLP-1 weight loss medications, such as Ozempic and Wegovy, illustrates how quickly the industry can change. Since 2023, LegitScript tracked a 424% increase in violative ads and listings in the GLP-1 space, underscoring the need for diligent monitoring.
How payment providers can stay ahead:
- Partnering with compliance experts to ensure real-time risk assessments
- Staying informed on regulatory shifts, including emerging product classifications
- Leveraging certification programs to onboard merchants efficiently and securely
Final Takeaways: Why Process forTelehealth Merchants?
Payment providers who embrace the telehealth space with the right compliance measures in place can benefit from long-term, stable merchant relationships. EMS and PaymentCloud’s 11% increase in pharmacy-related accounts and 30% volume growth in telemedicine transactions demonstrate the lucrative potential of this sector.
By partnering with trusted compliance bodies like LegitScript and prioritizing regulatory adherence, payment companies can safely and profitably support the future of telehealth.
The full webinar recording is available on-demand.
