How to Get a High-Risk CBD Merchant Account for Payment Processing?
CBD businesses are in great need of high-risk CBD payment processing services. The legal aspects of this industry have made it increasingly difficult for them to find payment processors. However, when the going gets tough, the tough get going!
The high-risk CBD industry is rapidly growing in the United States. In fact, it’s expected to cross a market value worth $22billion by 2022! Consumers can buy CBD products online as well as at physical stores. Despite a constant surge in demand and superb market potential, the CBD industry is always under the radar of governmental organizations and financial institutions.
For instance, the FDA (Food and Drug Administration) and the FTC (Federal Trade Commission) restrict unproven health benefit claims associated with CBD products. This is one of the major reasons why CBD merchants have to approach a high-risk CBD payment processor.
Why is CBD Merchant Processing Considered High-Risk?
CBD merchant processing is subject to strict and volatile legal impositions in the United States. CBD sellers and retailers aren’t as easily facilitated with payment processing solutions as other merchants. Due to numerous such factors, CBD merchant processing is considered high-risk.
While applying for a high-risk CBD merchant account, you may face some fundamental challenges, such as:
- Greater Transaction and Processing Fees
- Rolling Reserves
- Unpredictable Holding of Funds
In addition to that, the list of challenges keeps getting longer, thereby making it difficult for offline and online CBD stores to run their business. Particularly, the high-risk nature of the CBD industry has strengthened its stand after various high-end banks excluded CBD businesses from their portfolio.
Hence, high-risk merchant-processing services have become the need of the hour for all kinds of CBD businesses. Let’s dive deep into the legal facets which make the CBD industry a high-risk one…
Understanding the Legality of the CBD Industry
After the Farm Bill (2018) came into effect, hemp was no longer under the scrutiny of DoJ and DEA as a controlled substance. Currently, hemp isn’t an illegal drug and there’s no legal binding on it as that of Marijuana-based substances. Technically, Hemp products of the CBD variety contain THC amounts not exceeding 0.3%, unlike cannabis. However, the taboo revolving around CBD products still makes the industry look unfairly guilty.
From the point of view of banking institutions, this prejudiced stigma has led to CBD businesses being considered high-risk. Moreover, these businesses have become a legal risk for various other B2B entities, making it an imminent hardship for CBD sellers to find high-risk payment processors. They have to go through a lot of hassle to ultimately obtain a business-friendly high-risk merchant account provider.
Benefitting from High-Risk CBD Merchant Accounts
Financial institutions take the risk-free path of disengaging from CBD businesses as they fail to interpret clear differences between CBD and THC elements. This is why, as a CBD merchant, you must consider opening a high-risk CBD merchant account, which has many underlying benefits for you.
With CBD credit card processing systems still evolving, a high-risk merchant account benefits you in the following ways:
- Dodge and keep away from abrupt account closures.
- Skip superfluous merchant evaluations and background checks.
- Keep your routine business operations up and running.
- Focus on upscaling your business rather than its mere sustenance.
How to Choose the Best High-Risk CBD Payment Processor?
Selecting the right CBD merchant processor is as tricky as finding one! Nevertheless, here are a few essential factors to keep in mind when choosing a CBD payment processing gateway service provider:
High-Risk Payment Processing Services
A CBD merchant processing system requires a high-risk payment gateway (for e-businesses) and credit card terminals. Also, the processor you get in touch with must ensure streamlined services for high-risk payment processing. This is because many processors aren’t willing to take risks due to the high potential of chargebacks and payment frauds. Hence, consider choosing a service provider who has a proficient history of managing high-risk CBD businesses.
Integrated Payment Solutions
It’s important to find a high-risk merchant service provider who offers integrated CBD payment solutions. Integrated payment processing involves syncing of various payment processing hardware and software. This helps CBD sellers connect their business websites with payment gateways and virtual terminals. Also, it helps in linking different equipment with each other for a one-stop solution.
For instance, we at Patel Processing help with the all-around integration of your e-commerce website and payment-related hardware with our payment gateways, virtual terminals, and credit card processors.
Feasibility and Fees
The entire CBD market is aware of its high-risk nature. Thus, this gives a reason to payment processors to levy hefty charges from CBD sellers. You should assess your business feasibility when it comes to processing costs of high-risk transactions. Hence, you must opt for a CBD merchant processor who understands your business needs, industry-specific aspects, and budget. Also, be aware of hidden fees and costs associated with the CBD merchant account you choose.
Customer Support Services
You shouldn’t overlook the fact that chargebacks are common occurrences when it comes to high-risk transactions. While choosing a CBD payment processing service provider, check how payment disputes, refunds, and other relevant situations will be handled. At Patel Processing, a 24/7 customer support service timeframe allows merchants to resolve their issues quickly and effectively.
How to Create a High-Risk CBD Merchant Account?
There’s only one big difference between opening a usual e-commerce merchant processing accounts and a CBD merchant processing system. You will need a special merchant ID for CBD business. Once you find the right high-risk merchant account provider, here’s what you can do:
- Submit an application by filling up the merchant account form online.
- Provide the necessary identity proofs and documents.
- Provide product documents and information.
Once your merchant account is set up, you’re ready to perform your high-risk CBD transactions with sheer ease and convenience.
Patel Processing, a BBB accredited payment processing company, provides CBD merchants with a wide range of high-risk payment processing services. Sign up today!