In order to sell your CBD products online, you’ll need to have a CBD merchant account. Unfortunately, if you’ve been in the game for some time, you may know that working with banks while you’re in this niche can be somewhat tricky.
In most cases, while CBD is legal, it is a confusing topic for banks and credit card processors. In this article, we’ll discuss how to get a CBD merchant account so that you can start accepting credit cards on your website.
CBD Businesses Are Considered High Risk
While CBD is mostly legal in the US, it’s still considered a high-risk industry by banks. The FDA itself is still working out the regulations for the industry, and many things remain unclear. However, as long as you’re properly prepared, you can still find success with your online CBD store.
You cannot ignore the fact that the strict regulation of CBD means that it’s going to be considered high-risk until there is more knowledge about the industry. Many payment processors and merchant account service providers will be reluctant to work with you, which means it’s important to find the right merchant account for your business.
A high-risk merchant account and high-risk processor will not be afraid to help you with your payment gateway that will ensure that you’re able to take credit cards just like any other business out there. Check the High Risk payment processor.
Simply put: banks hate risk. CBD oil comes from hemp, and the confusing legalities behind the products make cannabis-related products a high risk – even if they don’t contain any THC.
Those who create and sell these products can be shut down easily if they are found in breach of the law. This means that acquiring banks and card payment processors face tons of refunds if that happens, along with the costs of chargebacks. This is a huge risk for them.
Because marijuana is still considered illegal under federal law in the US and outright illegal in some states, banks consider any part of the industry high-risk, whether it is legal or not. Until the industry matures and there is more acceptance and knowledge, you can expect that CBD companies will be considered high-risk.
CBD Merchant Accounts
There are factors common to all high-risk merchant accounts and the bank’s underwriters take a look and set their guidelines to determine the overall risk factor.
Different banks will always have different views on risk with the potential for fraud and chargebacks, which are some of the largest and most significant concerns when assessing a particular industry for merchant accounts.
When assessing the risk level of a business, there are a few factors they take into account:
- The industry
- Customer base
- Size, card payments, and credit history
- Number of transactions and average value amount
- Level of chargebacks and fraud
- Whether it operates online
Some businesses that deal with shifting legality – such as firearms and online gambling -will be high risk no matter what. Others are surprisingly high risk because of their risk of chargebacks, like airlines and eCommerce.
With a CBD merchant account, the bank and processor already know the type of business and have assessed the risks of handling electronic payments to mitigate the potential losses involved with operating online.
Because the operating costs for CBD businesses will be much higher, banks classify these companies as high-risk. See more about ecommerce credit card payment system.
How to Get a CBD Merchant Account
In order to obtain a CBD merchant account, all you’ll have to do is apply on our website. We have a 95% approval rate and can help you take credit cards online without any stress. Your business depends on your ability to accept credit card payments from your customers at the lowest rates available in the industry.
We have worked with thousands of high-risk businesses, helping give them the solutions they need.
Do you need a merchant account fast? We can approve you in as little as 24 hours: with NO application fee, NO setup fee, and most importantly, NO contract. You can sell your products online with less stress than ever before!
What to Consider When Looking for a CBD Merchant Account
High Risk Experience
Your CBD merchant services provider must have experience dealing with high-risk transactions. Because CBD is a new industry, there can be tons of card fraud and chargebacks, which means risk. Make sure to shop around for companies that have extensive experience working with high-risk businesses.
You should never have to switch your eCommerce website to a new platform to integrate a CBD merchant account payment processor. This means that you’ll have to spend more time and money getting your website ready to accept credit cards.
You may want to consider refraining from any CBD merchant services that require you to use one of their platforms. The company you work with should be able to integrate into your existing website seamlessly.
Not every CBD merchant services provider will make you sign a contract in order to start doing business together. However, each company’s fees and contracts will differ, so it’s important to read the fine print and make sure you choose the best one for your business.
Stay away from companies that don’t have testimonials from others in high-risk sectors. This may mean that they are new to the business and don’t have the knowledge required to help you achieve success.
In order to operate an online business, it’s important that your payment provider is available when you have questions. Online transactions dealing with CBD can, and probably will, face some issues – including chargebacks.
You’ll need to work with a company that can help you deal with these problems and understand why they are occurring. They will also help you understand risk mitigation so that you can avoid things like excessive chargebacks and fraud.