CBD Merchant Account
Credit card processing for high-risk businesses
We have the largest network of high-risk financial partners in the industry. We’ve thoroughly tested numerous processing banks to understand which are a perfect fit for every type of high-risk merchant account category. We provide a diverse array of solutions per business type unlike anyone else in this industry.
If you’re looking for a CBD merchant account with transparent pricing, almost instant approvals and expert support 24/7, get in touch with us today. We specialize in CBD payment processing, including CBD credit card processing, and our team is available to answer any and all of your questions.
Solutions for CBD Merchant Processing
Bankcard is a CBD payment processor that provides CBD merchants with premium high-risk merchant services. We utilize a variety of processing techniques to ensure that your CBD merchant processing is a smooth and simple process.
Some of the features of your CBD merchant account may include:
- Multi-bank processing (including off-shore)
- No reserve
- Fast settlements to merchants
- Secure payment gateway
- Chargeback alerts
- Chargeback disputes
- ACH/Check 21 processing
- Fraud prevention and protection
- Competitive processing rates (below industry standards)
- Merchants can begin processing in less than 1 week
As a CBD payment processor, Bankcard works hand in hand with CBD merchants to protect their businesses from merchant account closures, fraud and chargebacks. We’re proud of our award-winning fraud and chargeback protection.
Get to know us and we’ll show you why 50+ banks have partnered with us to help grow high-risk merchants both in the United States and offshore.
Speak with a CBD Merchant Account Specialist
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Table of contents
- CBD Merchant Account Frequently Asked Questions
- What to Look for in a CBD Payment Processing Gateway
- What is CBD?
CBD Merchant Account Frequently Asked Questions
CBD is a high-risk industry, which limits the number of merchant providers that will accept CBD businesses. This results in higher processing costs and an increased barrier to entry for many small business owners who want to cash in on this profitable niche market.
It’s not easy to get a merchant account if you sell CBD products, but financial companies (like Bankcard) are willing to work with businesses that have an established history of success and profitability.
Financial Institutions want your business – even though they’re apprehensive about high-risk transactions like those associated with selling CBD products.
A CBD merchant account is a type of credit card terminal specifically for merchants looking to sell high risk products such as cannabis. Most providers will not accept these types of transactions, but those that do have been known to take special precautions with their customers by involving multiple parties in an order’s process and inspection the company’s financials before approving it.
We’ve been made aware that PayPal is prohibiting the sale of CBD products, and we wanted to make you aware as well. If your account violates this policy it will be closed without warning or notice.
This means if you sell any type of hemp-derived product on eBay, Shopify, etc. through a third-party processor such as Paypal then you’re at risk for having your account closed without notification.
Yes. Square introduced a new pilot program in 2019 to allow CBD merchants to sign up for its services. Their CBD credit card processing rates are higher than Square’s normal rates, but there are no long-term contracts and no monthly fees. We don’t recommend using Square as a merchant account for your CBD business unless you’re a just processing a few transactions per month.
Yes. You can use the open-source WooCommerce platform without restriction, but you should be aware of their requirements when using other Automattic services with it – for example, if you’re shipping to customers or tracking inventory via Jetpack and want a mobile app that’ll work alongside your store’s design then this is where a CBD merchant account via Bankcard comes in handy. Our merchant account options are compatible with both Android and Apple devices so no one misses out on any deals.
If we were talking about CBD products though (or hemp at all), things get a little more complicated because there are restrictions put in place by law regarding what kind of payments processor merchants may accept from their international buyers. For these cases, WooCommerce Payments isn’t an option as per industry regulations.
Yes. Shopify supports the sale of CBD products in states where it’s legal to do so, but you’ll need a third-party payment gateway provider like Bankcard, but before we get into that there are some caveats worth noting. If your business is located in or catering specifically to an area where CBD sales aren’t allowed, it gets complicated.
In order to begin accepting credit and debit cards for CBD products, get started today by filling out Bankcard’s simple online application. To swiftly move the process along, you’ll need to provide the following documents:
-A valid, government-issued ID, such as a driver’s license
-A voided check
-Three months of the most recent bank statements
-Three months of the most recent processing statements, if applicable
-A SSN (Social Security Number) and/or EIN (Employer Identification Number)
-Chargebacks must be under 2%
-A secure, fully operational website. In most cases, it’s ok if the website hasn’t been launched yet as long as there is a working site in a dev environment.
What to Look for in a CBD Payment Processing Gateway
Finding a good high-risk merchant account provider for your CBD business involves the same criteria as a low-risk provider. It’s just harder to find a provider that offers the right combination of reasonable prices, fair contract terms, and high-quality customer service.
CBD merchant account approval
The underwriting process required to get approved for a merchant account can be tedious for any merchant, but it’s particularly difficult if you sell CBD products. Nonetheless, completing this process before you start processing credit card sales can save you from having your account suddenly shut down once you’ve started using it. You should be skeptical of providers offering “instant” approval of your merchant account, as they often defer this critical step until after you’ve already signed a long-term contract.
High-risk merchant account experience
It’s imperative that your CBD payment processor be able to deal with high-risk transactions. The reason for this is because this fairly new industry is prone to card fraud and chargebacks, which could cripple your business in a matter of days (if not hours).
As an industry that hovers around a legal grey area, only a handful of credit card processors will take risks associated with these types of transactions. Try to find companies, like Bankcard, who have extensive experience aiding businesses operating within risky sectors like CBD, the adult industry, offshore merchant accounts, etc.
Easy integrations and powerful technology
Nobody wants to hear that they have to switch their ecommerce website to a brand new platform in order to integrate a new CBD payment processor. That’s crazy!
This can be an incredibly time-consuming process; particularly if you’ve invested a lot of money and effort into perfecting the way your CBD website looks to your customers.
In order to avoid the hassle of being locked into one merchant processing system, it is best that you refrain from using CBD processors that require you use their existing platform. Instead, opt for a company that enables seamless integration with your current ecommerce software and has broad compatibility.
Companies that can offer these services will be the ones to do business with. They are capable of supporting you as your company thrives, and they’re also more likely to cooperate if there is a problem. A significant portion of CBD payment processors operate using API integration – which is by far the most common type of gateway available on any ecommerce store today.
The major benefit here? You have control over how things work in two different areas: being able to monitor it yourself and providing insight into what customers might see when viewing your website or mobile app from their own point-of-view!
With the popularity of CBD products on the rise, it’s no surprise that many entrepreneurs are looking for ways to get in on this new and profitable market. Selling your product online is one way you can do so – but there are some important legal considerations before launching a website that sells CBD products.
The legality of selling across state lines with regards to FDA regulations have created complicated grey areas when considering how far an entrepreneur should go regarding their proposal as well as what they sell within their site itself; states such as California or Colorado may be fair game while others impose stricter restrictions depending upon location – New York being a prime example where cannabis sales must occur via licensed dispensaries only.
The recent legalization of hemp-based products has created ecommerce opportunities that weren’t there as recently as 2018. Our CBD merchant account experts can set you up with a high-quality CBD payment gateway, which will allow your business to process transactions over the internet and significantly expand your reach. As not all states have relaxed their marijuana laws, be sure to find a provider who automatically filters out customers whose addresses are in places where CBD is restricted by law.
POS (Point Of Sale) Options
By finding a CBD payment processor with point-of-sale (POS) availability you’ll be able to manage both online and offline transactions as well as receive accurate reporting from POS software which will increase your profitability while also increasing customer loyalty.
If you’re in need of assistance when choosing the correct POS hardware, please feel free to reach out to us.
POS software can help you make lucrative business choices. What’s more, these types of systems are used to control stock input and output from a single location. If you plan on selling CBD products out of your retail space, then either get a dedicated countertop credit card terminal or use your mobile phone for processing with the aid of an appropriate card reader that plugs into it via USB port or Bluetooth connection.
NFC-based (contactless) methods would be preferred at this point in time but may not be compatible with some POS configurations depending on their hardware setup so EMV payments should still remain as minimum requirements just to ensure compatibility across all devices regardless.
Low CBD credit card processing fees
Although the more well-established companies may require a fee from account holders upon registration, many will provide their services for free or at an affordable rate.
Ask yourself if you can afford to pay the specific percentage your preferred provider charges per transaction and determine whether it works with your profit margins before signing up with them.
There are also a number of other fees to take into consideration when selecting a CBD payment processor, such as:
- Statement fees
- Compliance fees
- Non-compliance fees
- Terminal fees
- Monthly fees
- Annual fees
- Early termination fees
Chargebacks may also accrue additional fees, so it would be in your best interest to confirm this prior to establishing a partnership with CBD merchant processing companies.
The bottom line here is that any high-risk merchant account is going to cost a bit more than a comparable low-risk one. Be prepared to accept tiered pricing models, although some established businesses might be able negotiate an interchange plus model for slightly lower rates and fees.
You can also expect higher monthly and annual costs with such merchant accounts but the difference in these expenses isn’t as much when compared against other rates like processing charges which are usually substantially higher for high-risk accounts given the elevated risks of fraud associated with them – often requiring additional precautions from both merchants and processors (like rolling reserves).
A rolling reserve is where your credit card processor withholds a certain percentage of your funds every month until the reserve is met. While you’ll eventually receive all of it, rolling reserves can create serious cash flow problems for both small and newly established businesses.
There are many different payment processors out there, and each one has their own set of rules. Some won’t make you sign a binding contract before doing business with them but the fees will vary on what they offer. Others might tempt you with incredible rates that sound too good to be true so it’s best to do some serious research before you sign anything.
The way business is done changes with every passing day. You need to keep up-to-date on this and make sure you’re familiar with the latest trends, such as signing contracts for payment processors in order to conduct transactions through them. This will protect your company from fraud, but it’s important that not all of these contracts are binding so if something goes wrong or they don’t work out for some reason then there won’t be a long period of time where you can do nothing about it.
Amazing customer support 24/7/365
In order to be prepared for anything, you need to make sure that there are contingencies in place when it comes down to the risks associated with online and offline CBD transactions.
For example, if a customer wants a $200 chargeback on their recently submitted purchase of CBD-related products from your company… due process is necessary. This requires knowledge of how these types of situations will be handled by the payment processor’s customer service team which can have an impact on your business as well.
Bankcard has been working with high-risk merchants since 2011. We’re with you every step of the way!
Payment gateways are essential in the process of accepting credit card payments, but choosing one without doing your research can lead to all kinds of headaches. Before you choose a payment gateway for your website or store, it’s important that you know their policies on disputes and fraud protection at both levels because this will protect both you as well as customers from potential problems down the road.
You should also think about customer service options since there are some companies that offer personalized customer service while others only hire around-the-clock teams to take care of any calls or emails sent by unhappy shoppers before they escalate into major cases with damages more severe than just money lost due to an order not being fulfilled correctly.
With Bankcard, you’ll have a dedicated CSA (Client Success Advocate) that will always be there for you. You never have to worry about dealing with six different people, being on hold forever, getting passed back and forth with untrained employees that don’t know your account and your business.
We hate stuff like that. If you do too, Bankcard is probably an ideal fit for you!
With the above information in mind, take the time to ask a CBD payment processor about any additional and/or customizable services they can offer.
Since every company’s approach is unique, it’s crucial that you choose a credit card processing platform for your needs which includes all of these aspects:
- regulatory requirements
- fraud protection
- data security
- handling chargeback management
- guiding you through this process
- understanding what kinds of CBD products are being sold
What is CBD?
It might be almost 80 years since CBD was first discovered, but there’s still a lot to learn about this unique chemical compound.
Back in 1940, Dr. Roger Adams and a group of scientists from the University of Illinois successfully identified the non-psychoactive cannabinoid for the very first time. Some 23 years later, scientists managed to assess its structure in clarity.
Ultimately, this kick-started plenty of research into a molecule that has since been hailed as a medical marvel ingredient.
CBD occurs naturally in marijuana and hemp plants, but the vast majority of products filtering into the mainstream market are created using industrial hemp plants.
Although CBD boasts a fairly long history, it has never been discussed quite as much as it is nowadays.
In fact, CBD was exposed 20 years before the cannabis plant’s primary psychoactive cannabinoid THC was. Thanks to innovations in technology, scientists have been able to dig a little deeper into CBD’s therapeutic potential as of late, which has led to it overtaking cannabis’ high-inducing chemical THC in terms of what’s being talked about and researched.
This is not to say that THC does not possess therapeutic qualities — but for now, the world is paying close attention to CBD, since users need not experience mind-altering effects to reap the rewards.
Notwithstanding, unproven health claims are prohibited by the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) due to the risk of merchants making false claims and promises to consumers that could deter them from seeking professional medical care, merchants are limited to using a high-risk CBD payment processor.
Cannabidiol, or CBD, is a derivative of cannabis that can be extracted from both hemp and marijuana plants. CBD is sold in a variety of different forms: CBD oil, CBD tinctures, CBD drops, CBD isolates, CBD cream, CBD ointment, CBD capsules, CBD topical, CBD gummies, and more. CBD is not psychoactive in its purest state, and when derived from the hemp plant and sold as a medicinal product, is “legal” in all states per the 2014 Farm Bill. CBD has shown to be an effective treatment for a number of ailments, including:
- Alzheimer’s disease
- Parkinson’s disease
- Multiple sclerosis
- Cancer and chemotherapy side effects
- Hyperemesis gravidarum
- Anorexia Nervosa
- Mood disorders
- Nausea and vomiting
- Pain and inflammation
Is CBD Legal?
CBD’s high risk, combined with the fact that marijuana remains illegal at the federal level, makes the task of accepting online payments fairly restrictive for sellers.
“Marijuana-derived” CBD is not legal at the governmental level. “Marijuana” or “cannabis” as it is more commonly known as a part of the cannabis family, just like hemp. The difference is that cannabis grows with more than 0.3% THC; the plant’s psychoactive element.
Confusion between the two plants has caused controversy among hemp business owners who have struggled to find processing solutions that are willing to accept online ecommerce payments for CBD-containing products.
Even if your ecommerce business specializes in the sale of hemp-derived CBD, you will still need to seek out a reputable CBD payment processor that is equipped to handle high-risk transactions.
As an industry that is undergoing a constant metamorphosis in the legal aspect, you would benefit from staying on top of the evolving legal cannabis landscape across the U.S. For an up-to-date status by state, check out our blog post “Is CBD Legal: 2021 Edition”.
Speak to a CBD Merchant Account Expert