Merchants in the Cannabidiol (CBD) and Hemp Oil industries often face more challenges than most when applying for eCommerce payment services. Due to its association with the medical marijuana industry, most payment processors view CBD oil as high-risk. This often leads to CBD business merchant accounts being unexpectedly shut down, halting new transactions and freezing pending payments. However, CBD merchants have a reliable option for payment processing through specialized merchant account services providers that cater to almost every high-risk merchant in the CBD industry.

Since hemp was removed from certain controlled substances lists, financial institutions have become more receptive to these businesses. However, the CBD and Hemp industries often find themselves on prohibited industries lists at most credit card payment processors due to varying legal statuses.

Businesses partnering with Paywise Solutions will discover that CBD payment processing services are specifically designed and set up with the CBD industry in mind. Most high-risk industry payment processors offer generic merchant accounts and payment solutions that carry high costs and excessive red tape. A CBD-specific account provides businesses with stability in their merchant processing solutions, more competitive rates, and better payout schedules. Assisting businesses with CBD-friendly merchant accounts remains one of Paywise Solutions’ goals.

What is CBD?

CBD, a byproduct of cannabis, has become a topic of interest due to its medical benefits and legal status. Because CBD does not necessarily contain Tetrahydrocannabinol (THC), the hallucinogenic ingredient of cannabis, and when produced with THC levels below 0.3%, it is classified as Hemp. This classification allows for the sale of CBD in most locations without the risk of legal violations.

CBD can be consumed by smoking, vaporizing, or using as an aerosol spray. While it is illegal in many places to make medical claims about its benefits, CBD has been used in some approved drugs. An increasing number of products, from coffees and teas to candies and snacks, are being sold infused with CBD.

CBD Merchant Accounts

Traditionally, CBD has been sold through retail storefronts, primarily smoke shops or vape shops, often requiring cash-only sales. With the loosening of restrictions, payment processors allowed credit and debit card sales but only for swiped transactions. Today, most merchants with CBD stores can use their credit card machines for various transactions, including card-not-present.

Online sales surged as soon as payment processors began approving card-not-present transactions. Merchant accounts and payment gateways that allow CBD and Hemp Oil sales through their networks experienced significant spikes in volume. Payment processors work to ensure that the gateways are fully compliant with PCI standards, helping CBD merchants eliminate the risk of fraud or theft through their credit payment networks.

Businesses accepting phone or mail orders can use a credit card or virtual terminal. Virtual terminals are usually an added feature of a high-risk payment gateway program, ideal for e-commerce CBD businesses as they handle all online and phone orders in one location. By consolidating sales into one portal, transaction management for CBD merchant accounts becomes efficient.

Another popular choice for merchants is using CBD echeck processing services for online and retail sales. While credit cards are the most commonly used payment method, echeck is also a preferred option for some customers. Businesses offer this service in addition to CBD merchant accounts to help lower their fees for accepting cards and other non-cash payments online or in a merchant storefront.

Banking and Merchant Accounts for CBD

Until certain restrictions on CBD are lifted, it will remain legal on a case-by-case basis. Most credit card payment processors work across various jurisdictions, putting CBD into a gray area with varying laws and regulations.

While public sentiment has become increasingly favorable, it will take pressure on policymakers to make the necessary changes to laws. Until then, CBD businesses will need to seek out the services of specialized payment service solutions.

CBD Merchant Account Types Accepted

There are many different types of CBD businesses, all with guidelines to meet for CBD merchant account approval. Merchants must comply with all local and federal laws for selling and distributing CBD products. CBD merchants must also ensure consumers are over 18, requiring age verification software for online orders.

Our financial networks have a strong understanding of the CBD industry and many of the products offered. Some of the Cannabidiol product types we can provide CBD payment processing services for include CBD beauty products, creams, edibles, gummies, sprays, supplements, terpenes, tinctures, vape oils, vitamins, and Hemp Oil.

CBD Payment Processing Services Available

Businesses in the CBD industry now have more options than before. As payment processors become increasingly comfortable with the products, more features are available. What was once a cash-only business has opened up to online sales and distribution. CBD merchants can accept payments in most locations using credit card terminals, payment gateways, virtual terminals, and check and ACH solutions.

CBD Credit Card Processing Issues Affecting CBD Businesses

Many merchants launching an online CBD business have initially used common payment aggregators to accept payments online. However, these aggregators do not accept CBD businesses, and merchant accounts are not closed immediately after opening; their underwriters take a few weeks to months to check on a business. Once an audit is completed, a merchant is usually shut down immediately without notice, leaving the CBD business stranded.

Considered a high-risk industry by most payment processors, CBD businesses will want to partner with a CBD merchant services provider specializing in Cannabidiol. The concern from payment processors is not like other businesses where chargebacks or fraud create problems. Rather, credit card payment processors are concerned about the legal implications they might face for allowing a Schedule 1 drug to be sold through their network.

Businesses selling CBD will continue to experience problems with payment processors until CBD is recognized as a medical product. With most regions having different CBD laws, it proves too difficult for some processors to manage. Businesses that properly partner with a specialized processor will know that their hemp payment processing does not risk the complications of other payment solutions. Merchants operating without a CBD payment processor will be declared non-compliant with the credit card payment networks and have their accounts terminated soon afterward.

CBD merchants found non-compliant with their processor face account closures, held funds, and possible fines. The best solution for CBD businesses that do not want problems is to work with a specialized payment processor. At Paywise Solutions, our team understands CBD and only processes payments through our authorized CBD network. We aim to help eliminate potential problems, even chargebacks, with our client’s CBD credit card processing services.

Merchant Account Requirements for CBD Merchants

Most CBD businesses must apply with the same documents that other high-risk industries are required to provide.

• Identification of Owners
• Voided Check from CBD Business Checking Account
• Previous Bank Checking Account statements
• Previous Merchant Processing statements (when applicable)
• Copy of EIN

Most CBD merchant account service providers will also require the following documents to verify the products sold.

• Detailed Inventory of CBD products
• Copy of Lab Results for each product sold
• State Licenses/Registrations (where applicable)
• Onsite Inspections (where applicable)

Not every bank will require the same documents, but a CBD business should plan on having to submit most if not all, these documents during underwriting.

CBD Payment Processor Benefits with Paywise Solutions

The benefits for businesses partnering with Paywise Solutions extend beyond quick approvals for CBD merchant accounts. We work with merchants to provide the resources and tools to build a successful CBD business. While most payment processors will not engage with the CBD industry, we have set out to become a leading CBD processor. We can lower credit card processing costs by offering our partners the same features that general e-commerce businesses utilize. With various fraud scrubbing, chargeback prevention, and compliance monitoring, we lower our risk while helping businesses grow through our specialized CBD merchant accounts.

As a competitive and advanced payment processor, we offer our CBD merchants:

• 24-7 Customer Support
• Complete Online Reporting
• Online Transaction Management
• Ability to Capture Credit Card Information
• Fraud Protection
• Chargeback Prevention
• Full PCI-Compliance

 

Open a CBD Merchant Account Today!

Merchants in the CBD industry looking for reliable and affordable CBD merchant accounts are encouraged to apply at Paywise Solutions. We integrate with various e-commerce platforms, and our team of professionals can help businesses quickly set up their CBD payment processing at rates below our competitors. Our team will happily answer any high-risk merchant questions and address concerns about your company or our CBD services before you begin processing payments.