Setting up a CBD merchant account is essential because if you cannot accept payments, you won’t be able to ship CBD orders. As a result, you cannot build a list of positive customer testimonials, make a profit, keep the business running… (you can see where this is going).
Even though the big banks might not be able to collaborate with you for CBD payment processing, there are a number of gateways that will enable you to carry out transactions just like low-risk companies do.
2012 and onwards: Recreational cannabis becomes legal
Cannabidiol — otherwise known as CBD — is a phytocannabinoid that was initially discovered in 1940. The compound is one of 113 cannabinoids to be discovered so far and it accounts for 30% of the plant’s extract.
Charlotte Figi, a young girl reduced her 300 seizures a week and became almost seizure-free, thanks to CBD oil. This sparked the famous CBD business “Charlotte’s Web” and gave CBD a spotlight in the medical field.
When derived from hemp, CBD products generally contain less than 0.3% THC. Since THC (tetrahydrocannabinol) is a psychoactive substance that cannabis can yield in large quantities, anything that exceeds the threshold is deemed to be illegal.
Selling CBD online is a high risk business for more reasons than its association to cannabis. There are several other factors that deem CBD a high risk in the payment processing realm. First, an ecommerce CBD sale is an online sale. Meaning, the sale is processed as a “card not present transaction” which is inherently high risk payment processing. Additionally, high risk CBD businesses have very high discount rates and large security reserves (also known as a rolling reserve). A business is usually classified as a high risk merchant if the industry they’re in has a higher risk of fraud and chargebacks. In the case of being a CBD oil merchant, the high risk label is typically due to the business being a reputational and legal risk for banks and lenders. This is a result of the strictly enforced FDA regulations on CBD in the United States.
Disclaimer: Paykings does not directly underwrite or approve CBD merchant accounts. We facilitate via a CBD payment processor to connect CBD merchants selling CBD related products to an approving CBD Merchant account acquiring bank.
Look no further than PayKings, the leading experts in getting your CBD merchant account ready to accept payments.
How Does Being High Risk Affect Your Chances of Getting a CBD Merchant Account?
As a CBD company looking for a hemp merchant account to sell hemp products in an online market, it’s important to understand that credit card processing providers like Stripe and PayPal do not specialize in high risk industries. Therefore, they cannot process payments for the hemp merchant. Unlike those companies, PayKings has many acquiring bank partners that approve CBD accounts. Merchants who offer high risk services or CBD and hemp products must consider a provider that specializes in high risk processing industries. The payment processing provider will help you establish your high risk merchant account.
If you’re looking for CBD merchant processing, it’s important to understand why payment processors are often difficult to obtain (and retain) for sales in the CBD industry. CBD product sales are considered to be high risk in the online merchant account world due to the nature of how the oil is cultivated. CBD is a legal product. However, it is derived from the same plant, which breeds its regulated counterpart, cannabis. The very notion sends banks and lenders into high alert often resulting in your CBD oil merchant account being labeled high risk. Right now, CBD is categorized as a high risk business regardless of what kind of CBD products you carry in your online store.
For businesses that are considered high risk, it is important to align yourself with the right CBD merchant processing providers. PayKings is a high risk merchant account provider that is trusted and proven to process transactions for your high risk business at competitive rates. We offer custom-tailored solutions to merchants in the CBD oil industry that need a payment gateway for selling their CBD products in an online market. With a CBD payment processor that fits your business, you are able to get set up with legitimate debit and credit card processing. PayKings will expertly pair you with a solution that is willing to accept the liability for the increased risk associated with your high risk business.
If you are still in the early stages of building your online CBD store, then you’ve come to the right place. Signing up with the best CBD merchant processing company from day one saves you the time and frustration of getting shut down by payment processing companies like PayPal, Stripe, or Square. When you establish a payment processing solution through PayKings, you avoid any funds being frozen. Your stream of income then remains steady and reliable. If you are looking for CBD merchant processing that can offer you competitive solutions and rates, PayKings is your ideal choice.