CBD is a growing product in the country at the moment. Essentially, it can operate the same as Cannabis but has fewer THC levels. For people that curious about weed or related products, it can be a nice half-step. Additionally, it is federally legal with the Farm Bill being approved and signed by then-President Donald Trump. The increase of e-commerce businesses looking for payment gateways revolving around CBD has increased. This article will tackle and shed light on merchant accounts and everything you need to know about credit card processing for CBD.
What Is CBD?
Just a refresher, Cannabidiol (CBD) is a compound found in cannabis and hemp. There are more than 100 cannabinoids, but the most known one is tetrahydrocannabinol which is the cannabinoid that causes intoxication part when cannabis is used. CBD products are made through various steps that you can either do yourself or outsource someone to do for you. The steps for CBD products include harvesting and cultivating, extracting, and infusing it in various products. Ever since 2018, the CBD industry has been booming and growing fast. However, while CBD is a legal and popular dietary supplement, the hemp and cannabis industry still struggles with banking, insurance, and even advertising, with the general notion and negative stigma surrounding cannabis.
Legality Of CBD
The confusion between Marijuana and CBD is usually the leading cause of why it makes CBD payments, advertising, and insurance hard. Marijuana is not legal. At the same time, CBD is legal; the mix-up between the two makes it reasonably tricky for CBD merchants to find solutions that are accepting of online payments regarding CBD-related goods. Finding a good and proper CBD payment processor is essential for CBD marketing because these products are high-risk transactions that not everyone is willing to touch upon.
Merchant Accounts For CBD
A CBD merchant account is a unique merchant account legally approved to sell CBD-related products and goods. The CBD industry is a very high-risk business, so most merchants struggle to find a credit card specializing in high-risk transactions with products such as CBD. Most providers don’t offer banking to CBD products due to the confusion it shares with marijuana. Still, some reputable payment gateways such as Bankcard offer this credit card terminal specializing and catered to merchants selling CBD.
Credit Card Processing
While CBD is legal in most forms, with the product containing cannabinoids, the market and industry of hemp and cannabis are still considered a high-risk industry. As a result of this reputation, many payment processors avoid and ignore CBD-related businesses, which makes the legal payment processes of these companies tricky. Getting a CBD account with a suitable high-risk processor is the sure-fire way to end this dilemma it comes to payment gateways. Bankcard is a payment gateway that handles high-risk merchant accounts, packed with essential tools that can facilitate high-risk business transactions just like how low-risk businesses can.
How To Spot A Good CBD Merchant Service Provider
The CBD industry is a high-risk market. Your payment processing gateway must be a great CBD payment processor willing to take these high-risk transactions with you to ensure all of your transactions are handled well. Here are a few aspects you should check before opening your CBD merchant account.
The most crucial part of finding a proper CBD merchant service provider is if they can handle high-risk transactions. The payment processor can handle this because new industries usually fall victim to scams such as chargebacks or payment fraud. There are only a few CBD payment gateways that can handle these high-risk transactions.
Perfecting the look of your CBD e-commerce store can be a handful of a task. Building your site the way you want it to look can get tiresome and time-consuming. Be sure to avoid CBD merchant service providers requiring you to use their platforms instead when you can because this undermines and erases the effort you have used to set up your site, especially if you paid good money to make it look good. Look for a service provider that can readily incorporate their payment system into your e-commerce website. CBD payment systems usually run through API integration, an easy-to-use payment gateway that can be monitored easily by both the CBD merchant and the service provider.
Most CBD service providers charge a hefty fee when it comes to handling your businesses’ high-risk transactions. Be sure to find a CBD service provider that is fair and affordable when it comes to their rates and fees; check if their prices would align with your budget and profit. Watch out for additional fees such as monthly, annual, statement, compliance, etc., and discuss these with your selected CBD service provider.
While contracts would differ between CBD service providers, be sure to find one that would best align with your CBD business’s goals. Be wary of CBD service providers who do not have reasonable backing and avoid establishing long-term partnerships with them. Be sure always to negotiate and try to see what could work best for your business and the service provider.
Transaction errors, refunds, and other payment-related issues are everyday things. These types of misfortunes can also happen in high-risk transactions involving CBD products. Be sure to find a CBD service provider that would be able to help and tackle future issues such as refunds and errors. After all, how they handle these issues and how fast they are dealt with would also reflect on the service your CBD business is showing to its customers.
Before you start your CBD merchant account, it is vital to find the proper CBD service provider that can provide your business with an appropriate credit card payment gateway that would be able to handle these high-risk transactions. Payline Data is well known in this space for that exact reason.