The CBD oil industry is worth $3.7 billion. That number will increase to $5.3 billion by 2025. Despite the lucrative market, merchants still face challenges in finding CBD oil online payment processing solutions.
Banks, third-party processors, and merchant aggregators like PayPal refuse to work with CBD oil merchants because of the high risk involved.
This article will detail why the CBD industry is considered high risk. You will also learn how to get an approved merchant account. Save time and sign up now to apply for a legitimate merchant account for your CBD oil business.
Why is CBD Oil Online Payment Processing Considered High-Risk?
Cannabidiol, also called CBD oil, is a type of cannabis plant. CBD oil is present in both marijuana and hemp. However, hemp has been legalized at the federal level in the United States because it contains less than 0.3% of THC, which causes the “high” associated with marijuana.
People use CBD for health benefits, including treating anxiety, epilepsy, opioid addiction, unmanageable pain, and so on. The FDA approved Epidiolex, a prescription drug for epilepsy based on CBD oil.
Even though cannabidiol contains almost no THC, many banks and payment processors refuse to work with cannabidiol merchants because of the political climate and uncertainties associated with this business type. Additionally, the potentially high percentage of chargebacks and returns associated with CBD sales is also a concern.
There are many different factors that can cause these chargebacks. First, CBD oil merchants often ignore rulings that strictly regulate the amount of THC in their products.
According to a recent Mayo Clinic study, 18 out of 84 online CBD oil products contained THC. More than 25% of the 84 products had less CBD oil than labeled. The unreliability of cannabidiol products significantly affects the willingness of banks to work with merchants.
Another reason is that the only CBD oil product approved by the FDA is epidiolex, a prescription drug for a rare form of childhood epilepsy. Additionally, there is a stigma associated with using marijuana to get high. Most people still don’t understand that CBD and THC interact with the human body differently.
How to Apply for an Online CBD Oil Merchant Account
1. Find a Credible CBD Oil Payment Processor
The first step to applying for a high-risk merchant account approval for CBD oil online payment processing is to find a credible account provider. Working with a reliable processor makes both you and your customer feel safe.
2. Fill Out an Online Form
You can fill out an online form detailing information about your business and CBD products. Provide your business name, ownership info, supporting business documents as proof, and three to six months of previous bank statements showing business cash flow.
3. Provide Documents Showing That You Meet All Regulations
Show as much as possible that your products meet the regulations for CBD oil-derived products. Some of these regulations are:
- that your CBD products are derived from hemp and not from marijuana.
- That your products contain less than 0.3% of THC.
If you are currently accepting cbd oil merchant payments, make sure to include the chargeback report in detail so that the processor gets the complete picture. It takes anywhere from three days to a week to get a CBD oil merchant account approved.
Benefits of Acquiring High-Risk CBD Oil Online Payment Services
Collect Payments From Anybody
High-risk merchant accounts allow CBD business owners to offer several payment methods to customers.
With a merchant account, you can collect card payments, EFT & ACH payments, and e-Checks through a high-risk e-Check gateway. You can even process payments offshore and in different currencies depending on your setup. These other payment options increase your customer base by enabling you to collect payments from anybody.
Establish Credibility and Properly Brand Your Business
Having a reliable CBD payment processing account establishes the credibility of your business. Customers feel they can trust you when they see you’re using a trustworthy payment processor. A good, streamlined checkout process and top-notch customer support will go a long way.
A payment processing account boosts brand awareness as people are willing to recommend your business to friends and family.
Work Directly With Acquiring Banks
Once you have an active, dedicated merchant account, you no longer have to fear third-party processors like PayPal and Stripe suddenly closing down your account. With your dedicated MID (Merchant ID), you can deal directly with Cannabis friendly acquiring banks and merchant service providers, both of whom know your business type and are eager to help.
Use a POS System
Many merchant account providers allow you to request a POS machine. If you run a physical CBD oil store, some customers prefer to pay with their cards. With a POS system ready, you can accept card payments from customers and have the money credited to your account within 2 to 3 business days, or the next day if needed.
How to Select CBD Oil Online Payment Services
Even though many banks and service providers refuse to work with high-risk businesses, there’s still a large number of credit card processors who are willing to partner with CBD oil merchants.
Here are some factors to look at when looking for a CBD oil online payment processing solution.
Has a Long Track Record
Consider partnering with a payment processor that has been in the merchant account business for a long time. This way, you can find reliable reviews of their services and maybe find previous customers. An account provider with a long track record is more trustworthy.
Works With High-Risk Businesses
No matter what they tell you, a good number of CBD merchant account providers are not familiar with high-risk businesses. Partner with a processor that has worked with many companies in several high-risk industries. That means they expect high rates of returns and chargebacks.
Has Reliable Customer Service
You need to partner with a payment processor that is available 24/7 to deal with any issues that may come up. It would help if you did not deal with too many auto-responses. Look for reviews about their customer service.
Integrates CBD Oil Online Payment Services With Your Website
We recommend integrating a cbd oil online merchant payment processor that can securely process payments from inside your website. Customers don’t want to be directed to external websites to input their card details. It destroys your credibility and increases churn rates.
Partner with a payment processor whose payment gateway integrates with your website and processes several currencies.
Offers Reasonable Fees and Contracts
Look for a payment processor that will not overcharge you to be on their platform. Ensure they don’t lock their customers into a long contract period or charge them early termination fees if they decide to leave.
Has a Tolerance for Higher Chargeback Percentages
Ascertain how the processor deals with chargebacks. Ensure that you know the maximum chargeback rates they’re willing to tolerate. This way, you will know on time if it will be a profitable and comfortable partnership.
Conclusion – CBD Oil Online Payment Processing
SecureGlobalPay is one of the rare CBD oil online payment processing solutions with decades of experience working with high-risk businesses. Reach out today to get a free quote and start the fast process of approving a CBD oil merchant processing account. It is possible to get an account approved instantly.
All references to CBD oil in this article concern hemp-derived CBD, not marijuana-derived CBD.