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What to Know
Are you seeking a secure payment processing solution for selling CBD or Hemp products online? The challenges faced by CBD businesses in payment processing are not uncommon, stemming from factors such as reputational risk, legislative considerations, and the potential for chargebacks. Traditional banks and payment processors may exhibit hesitancy in extending services to these businesses, driven by concerns related to regulatory implications associated with transactions involving cannabis-related products. Moreover, credit card processors often impose restrictions on the categories of products they are willing to process payments for. The insufficient security measures implemented by many processors pose risks for both business owners and customers. To address these challenges, it is crucial to identify a reliable and compliant CBD hemp and ancillary cannabis payment processing system.
Features
What You Can Sell With a CBD & Hemp Merchant Account
Elevate your CBD and Hemp business with a dedicated merchant account, providing your customers with a dependable, secure, and compliant payment solution. By utilizing a reputable payment processor, you can expand your reach while minimizing risks, safeguarding your CBD business from potential fraudulent activities or chargebacks. Currently, we support a variety of CBD and Hemp products.
Some of the CBD and Hemp products we are currently supporting include:
- Teas
- Skincare
- Hemp oil (Pure isolate or Full spectrum)
- Pain relief sprays
- Supplements and capsules
- CBD pet products
- Edibles including gummies, chocolate, and lollipops
- Delta derived products (D8, D10, HHC, etc.)
Why the CBD Hemp and Ancillary Cannabis Industries are Viewed as High-Risk
U.S. Restrictions on the Sale of CBD or Hemp Products
As of 2023, the Food and Drug Administration (FDA) has stated that CBD cannot be considered a dietary supplement or food additive. Therefore, the FDA does not have any plans to regulate CBD in the near future. The laws surrounding CBD vary depending on the state. In most states, CBD is legal as long as it has less than 0.3% THC—which is the psychoactive ingredient. As you can see, the laws and regulations surrounding CBD are ambiguous and borderline confusing. That’s one of the reasons why it’s a high-risk industry.
Frequently Asked Questions About CBD & Hemp Payment Processing
What is a hemp merchant account, and why do I need one?
A hemp merchant account is specifically designed for transactions involving hemp products like CBD oils and tinctures. Banks often view these businesses as high risk due to regulatory issues and chargebacks, so a dedicated account helps prevent your payments from being blocked or frozen unexpectedly.
How do high-risk payment processors support CBD businesses differently?
High-risk payment processors for CBD providers are well-versed in the specific regulations and risks of the CBD and hemp industries. They usually provide stronger compliance checks, flexible underwriting, and ways to tackle fraud and chargebacks, all designed for companies in this area.
Can I use a hemp oil credit card processor even if I’m a small business?
A hemp oil credit card processor can assist small businesses, but requirements are usually stricter than for low-risk merchants. To apply, you’ll need product documentation (like Certificates of Analysis for THC levels), business registration, and possibly previous sales history. Many processors will work with startups if they meet compliance standards.
What’s required to open a CBD merchant account?
To set up a CBD merchant account, you’ll need to share some important documents, like your business registration and licenses, plus lab test results that show your THC levels are within legal limits. You’ll also have to explain what products you sell, how your supply chain works, and your marketing methods. This information is essential for the bank to assess risk and ensure regulatory compliance.
How do CBD merchant processing services differ from regular merchant processing?
CBD merchant processing involves stricter due diligence, compliance checks, and risk management compared to standard accounts. Because CBD is considered high risk, this often leads to higher fees, held reserves, and closer monitoring or audits of accounts.
Can I use merchant processing for CBD across different states or countries?
Yes, but you must work with a gateway or processor compliant in each jurisdiction. Merchant processing for CBD must respect the laws in each state or country; some places still restrict or regulate CBD heavily. The processor will ensure that your transactions and operations comply with local regulations, so your funds remain secure.
How do I select a hemp oil merchant processing provider?
Choose providers with experience in the CBD and hemp industry. Look for transparent fees, strong compliance standards, and effective chargeback and fraud protection. A reliable hemp oil merchant processing partner will assist with documentation and ensure your site and marketing are compliant.
Can a hemp merchant account handle online and in-store payments?
A hemp merchant account can handle both online and in-store sales. Most payment processors provide a payment gateway for selling online and a terminal for in-person transactions, making it easy to manage payments while following the rules and regulations.
How can I reduce the risk of chargebacks with CBD merchant processing?
To reduce chargebacks in CBD merchant processing, provide clear product descriptions, have simple return policies, and use fraud detection tools from your processor. Educate customers about your products and offer good customer service to minimize disputes and maintain a healthy account.