Payments · Skincare6 min readUpdated October 26, 2026

Skincare Payment Processing

Why skincare brands get funds held or accounts closed though no processor bans skincare, the claims and offers that trigger it, and a stable setup.

Nick Bonnassies, CMO at Tagada · checked against 16 sources

Article summary

TL;DR

No major processor bans skincare. Accounts get held or closed because of what a brand says and how it sells: claims that make a cream sound like a drug, trials that roll into auto-ship, before-and-after promises and disputes. A stable setup is a merchant account that reviewed your claims and offers first, billing that follows Visa and Mastercard subscription rules, and a second processor ready to take over.

Stripe, PayPal, Square and Shopify Payments don't name skincare; the lines that apply cover harmful or unverified health claims and subscription offers.
Under FDA guidance, a product "to remove wrinkles or increase the skin's production of collagen" is a drug or device; "moisturizing is a cosmetic claim".
Visa's MCC 5968 for subscription merchants names "cosmetics".
A beauty marketplace was cut off from Shopify Payments with immediate effect, as Beauty Independent reported.
Visa flags US merchants at a 1.5% fraud and dispute ratio since April 1, 2026.

Want to go further? Ask

On this page

This page is the hub for skincare payments. The store side is in our guide to the best ecommerce platform for skincare brands.

Why skincare brands lose payment processing

Trigger	What the rule says	Who sets it
Drug-like claims	"Pseudo-pharmaceuticals or nutraceuticals that are not safe or make harmful claims"	Stripe1
Unverified health claims	"Products that make health claims that are not verified by a local or national regulatory body"	Shopify Payments2
Trials into auto-ship	"Reduced price trials with unclear or hidden pricing" prohibited	Stripe1
Subscription and upsell models	"Direct marketing or subscription offers or services"; "up-sell merchants" unsupported	Square4
Disputes	1.5% of settled transactions, at least 1,500 cases a month	Visa VAMP12

The category has a history: the FTC's AuraVie case involved "risk-free" skincare trials followed by charges "of up to $97.88 per month"11. Processors remember it.

1.5%

Visa VAMP fraud and dispute threshold for US merchants since April 1, 2026

1,500

Cases a month before Visa's threshold applies

$97.88

Monthly charges after AuraVie's "risk-free" skincare trials

120 days

Typical Stripe payout pause on unacceptable risk

What Stripe, Shopify Payments, PayPal and Square say

Provider	Skincare named?	The line that applies	If it goes wrong
Stripe	No	Harmful claims, unclear trials1	Payouts typically paused 120 days on unacceptable risk16
Shopify Payments	No	Unverified health claims2	A merchant reports "20% of our funds for 120 days" held10
PayPal	No	"Products that present a risk to consumer safety"3	Holds and reserves
Square (US)	No	Subscription offers, up-sell merchants, membership clubs4	Payouts deferred

Cutoffs can come with immediate effect: a beauty marketplace was cut off from Shopify Payments, as Beauty Independent reported9.

Details: Stripe, Shopify, PayPal and Square.

Cosmetic or drug: the line processors read

Cosmetic (fine)	Drug (risky)
"Cleansing, beautifying, promoting attractiveness, or altering the appearance"5	Treats or prevents a disease, or affects "the structure or any function of the body"5
"Moisturizing"7	"Remove wrinkles", "increase the skin's production of collagen"7
"Smooths the look of fine lines"	"Regenerate cells", "intended to treat acne"6

Moisturizers and makeup with sun-protection claims are both cosmetic and drug6. Full guide: cosmetic or drug claims.

Merchant category codes

MCC	Covers	Source
5977 Cosmetic Stores	"Merchants classified with this MCC sell cosmetics"	Visa8
5968 Continuity / Subscription	Direct-marketing subscriptions, including "cosmetics"	Visa8
5999	Includes "Beauty Supply Stores"	Visa8

Mastercard requires registration and MCC 5968 for negative option billing of physical products14.

Fig. 1Which code a skincare brand processes under

Your skincare brandOne business, three possible codes

5977 Cosmetic StoresMerchants that sell cosmetics
5968 Continuity / SubscriptionDirect-marketing subscriptions, including cosmetics
5999Includes Beauty Supply Stores

How you sell decides the code, not only what you sell.

Visa Merchant Data Standards Manual, April 2026; Mastercard Security Rules, February 2025.

Your three setups

Setup	Strength	Weakness
Aggregator (Stripe, Shopify Payments, PayPal)	Live in minutes	Review later; holds and closures without warning
Underwritten merchant account	Claims and offers reviewed first	One account is still a single point of failure
Several processors, one checkout	A closure moves volume instead of stopping it	More applications

Fig. 2Several processors, one checkout

A closure moves volume instead of stopping it.

Illustrative example. Routing rules are set per store.

Backup and routing: payment routing for skincare brands.

What high-risk processors publish

Processor	What it publishes	Source
Soar Payments	Refuses "free plus shipping fee" offers, free trials and "exaggerated health claims"	15
PaymentCloud (continuity)	Rates "typically range between 2.95% and 3.95%"; free trials: "Most likely, no."	15
PayKings	Reviews "trial offers, and continuity billing"	15
DirectPayNet	Asks for a chargeback ratio "under 2%"	15

None of the pages we read publishes a reserve percentage for skincare. Fees in detail: skincare processing fees and reserves.

Thresholds and subscription rules

Rule	Requirement	Source
Visa VAMP	1.5% (fraud + disputes), US, since April 1, 2026	Visa12
Trial terms	Shown separately; reminder at least 7 days before the end; online cancellation	Visa13
Negative option	Registration and MCC 5968	Mastercard14

Tagada follows Visa and Mastercard rules and the laws that apply to payments.

Guides for skincare brands

Theme	Guides
Providers	Stripe · Shopify · PayPal and Square · Amazon, TikTok Shop and marketplaces · Cosmetic or drug claims
Getting started	Is it legal to sell skincare online? · Start a skincare brand · New brands · Get approved
Money	Fees and reserves · Payouts · International · Payment methods
Staying approved	Compliance · Advertising · Subscriptions · Trial offers
Disputes and fraud	Chargebacks · Chargeback alerts · Fraud and 3D Secure · Declined payments
When things go wrong	Stripe closed your account · Switch payment processor

How Tagada helps

An underwritten skincare account, with a second route ready

Each TagadaPay file is underwritten, with enhanced review on regulated verticals.

Need	What Tagada provides
A merchant account	TagadaPay, underwritten per file
A second route	Routing across Stripe, Adyen and TagadaPay with one logic, cascade on decline
Subscriptions	Trials, billing cycles, retries and automatic recovery
Fraud control	Native 3DS2, device intelligence and a rules engine
Checkout	One-click upsells, order bumps, A/B tests, Apple Pay and Google Pay
Tracking	Server-side events to Meta, Google and TikTok

Plans are on the pricing page.

Apply for processing

An underwritten skincare account, with a second route ready

Updated on October 26, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

Is skincare considered high risk for payment processing?

Not by name: Stripe, PayPal, Square and Shopify Payments don't list skincare. It becomes high risk through drug-like claims, trial and subscription offers, and disputes, which is how the category is usually sold online.

Why was my skincare brand's account closed?

Usually claims read as health claims ("treats acne", "removes wrinkles"), a trial or upsell funnel, or disputes rising. The notice rarely says which; check what changed in your pages, ads and offers.

What MCC does a skincare brand use?

Usually 5977 Cosmetic Stores, or 5999 for beauty supply. Direct-marketing subscriptions use 5968, which names cosmetics, and Mastercard requires registration for negative option billing.

Can I sell skincare with Stripe?

Yes. Stripe doesn't name skincare; it prohibits harmful claims and unclear trials. It reviews later, and on unacceptable risk typically pauses payouts for 120 days. More: does Stripe allow skincare?

Do I need a backup processor for a skincare brand?

Once subscriptions matter, yes. Cutoffs can come with immediate effect, as Beauty Independent reported for a beauty marketplace. A second processor keeps orders and renewals running during a review.