If you own a hemp business, you are guaranteed to encounter hurdles especially when you are searching for merchant services. It all begins with looking for a CBD hemp oil eCheck merchant account because it is unfortunately not as simple as just ticking a few boxes on an online application.
What is CBD?
From the hemp plants, a compound is taken which does not contains high amount of THC. The compound is called CBD, and THC is the element in it which possess pain killing/psychoactive properties. The compound also contains other properties like anti-anxiety, anti-inflammatory, and analgesic.
Cannabidiol (or simply called CBD) is one of the many active cannabinoids that are found in cannabis. As the different governments are starting to look at all the different benefits and disadvantages of making cannabis legal (both for recreational and medical reasons), the possible advantages that other products like CBD can offer have come to attention. Now CBD has several perks in store, but do not offer any intoxicating effect. In fact, some experts in the health industry describe CBD’s perks as unbelievable. It shows promise in treating depression, inflammation, epilepsy and even certain types of cancer, to mention only a few benefits.
Nowadays, federal, local, and state governments are discussing the advantages and disadvantages of legalizing cannabis for recreational and medical use. The products made of marijuana are getting popular due to their amazing benefits. One of those products is CBD which is also known as cannabidiol. CBD credit card processing is new in the E-commerce industry. Many providers still do not offer this type of merchant account because it falls in the high risk category. However, some providers are now offering solutions for eCheck processing of CBD merchants accounts because many merchants sell dietary and health products that contain CBD.
As CBD is made from the hemp plant, this kind of industry is regarded as high risk. Consequently it is key that merchants who operate in this industry convey that they are legitimate.
Fortunately, some merchant account providers work only with high risk companies and while CBD merchant accounts are still rather new, there are businesses, such as Allied Payments that can assist merchants that sell CBD products to help them get the Check processing services they require to do business. We integrate with; WooCommerce, Shopify, BigCommerce, Ecwid, LimeLight, Magento, Opencart and Prestashop to name a few.
A reputable merchant account provider will also offer you solutions for herbal remedy merchant accounts. Some providers call them medical marijuana merchant accounts or nutraceutical merchant accounts. Therefore, you will have to talk to a merchant account manager for each service and get the details.
When you are looking for dependable, secure and real eCheck merchant services, an understanding about the problems that relate specifically to the services or products is really useful. Take note that because it is hard to get a CBD merchant account, a few fake sites and companies have also unfortunately popped up.
The Financial Details Of CBD Companies
The legal cannabis field is as a matter of fact doing very well. If you look at the numbers, in 2018 this field will boast about $8 billion in revenue. Now apart from working out the logistical and legal issues, you will also have to give some thought to how you will process your payments. You see, card processing services to CBD merchants are often rejected and if approved, merchants are charged an expensive rate.
That being said, even though CBD is legal in a number of states that have made marijuana legal, merchants must still take note of the following restrictions:
• A CBD merchant must be located in one of the states where marijuana has been legalized.
• You will require a merchant account for processing payment methods like debit or credit cards. When you do not have options like these available, it will be difficult for your company to operate properly. The majority of entrepreneurs want to be able to operate their companies in a legal and transparent way. However, the cost to achieve this leads to reducing your profit and limiting your growth.
Restrictions for CBD Credit Card Processing
Cannabidiol is not legal in most states of United States. The US Government has legalized marijuana for recreational and medical use in only few states. Therefore, merchants face some restrictions which you should be aware of:
- Marijuana is considered as an illegal substance by the US Federal Government.
- District of Columbia and dozens of states have legalized the use of marijuana; therefore, the CBD merchant must be a resident of one of these places.
Getting a CBD eCheck Account
Go to the website of the CBD eCheck account provider and contact the manager dealing with this type of account and apply. You can apply for Allied Payments directly by scrolling to the bottom of this page and clicking the “Apply Now” button.
Marijuana is still illegal because of the legislation of the Federal US Government. However, providers still can provide you with a domestic CBD eCheck merchant account.
Five Key Things When Opening Your eCheck Account
1. Establish your company
Established businesses get offered accounts by banks and financial institutions. You will have to own an existing bank account before you can even try to get a CBD eCheck account.
2. Volume per month
High risk companies have to put up with expensive fees for accounts. On top of that, these types of businesses also need to cope with the reluctance of the financial institutions to do business with them. How much business you complete is one of the main things that banks look at.
3. Reduce chargebacks
Chargebacks are the fees that a company is required, by a credit card provider, to pay, in order to cover any losses because of a fraudulent or disputed transaction. There are several things that can cause chargebacks. Nevertheless, it costs a lot to companies and their merchant service providers. It is less difficult to get an account when you have strategies that try to minimize chargebacks. So, if you are involved in this industry, ensure that your chargeback frequency rate does not exceed 2% of your transactions. As a matter of fact, there are tools available that can prevent chargebacks and fraudulent activity. In short, your company’s risk is calculated based on fraud and chargebacks. So, if your company is linked with more chargebacks, you pose more risk.
4. An impressive processing history
If you have been processing payments for a longer time, your chances of getting an account are better. Another tip is that they must list their services or products as well as the prices on their site. A website that has everything it needs helps with getting an account.
5. The Fees Linked With A CBD Merchant Account
There are many factors that determine the fees that will be charged. These include the processing history of the merchant, the kind of industry (in this case, it would be CBD/high risk) and the predicted volume of the sales. In short, every single merchant account is unique, however some of the typical fees are:
• A fee charged per transaction
• A fee for your monthly statement
• Merchant discount rate
• Rolling reserve
• Setup fee
• Refund fee
• Chargeback fee
Timetable for A CBD eCheck Account
The time for the approval of a CBD eCheck account varies due to factors like the provider’s processing history and the merchant. If all supporting documents and materials are provided then your eCheck processing solution will be activated within 1-3 business days.
CBD eCheck accounts are different. Every legitimate business is accepted. The approval time for your CBD eCheck account is 1 business day.
Fees of CBD eCheck Accounts
The fees of CBD eCheck accounts depend on projected monthly volume. They include projected sales volume and processing history (if any) of the merchant. Although the case of each merchant is unique, a typical CBD eCheck account will include the following fees:
• Per transaction fee
• Merchant discount rate
• Monthly gateway fee
Integration of CBD eCheck Accounts and Payment Gateways
When a provider approves your eCheck account, the acquiring banking partner provides you access to its payment gateway. Providers choose trusted banking partners for this purpose, and those partners offer you a secure payment gateway for all your transactions. Your website gets to connect to the API of the bank.
The CBD industry is an emerging market, and it is facing many challenges. The financial institutions are not keeping up with the legislation of each state although medicinal benefits of CBD are not a secret anymore. It is why finding a stable merchant banking solution is the biggest challenge that almost all CBD businesses are facing.
Despite all challenges, the future of CBD sector is bright. Several providers of merchant account providers are working to facilitate merchants belonging to this sector of the E-commerce industry. Some CBD merchants say they have found solid banking partners that are willing to work with them for years. Many financial institutions have also realized that the business of CBD products will grow in the coming years. Therefore, providers and banks have started to take this industry very seriously now. Now it is easy for the merchants to find strong banking connections, fraud prevention tools, state-of-the-art payment gateways, and years of experience when they choose to accept eChecks.
Obtaining a CBD eCheck account is just the beginning to a long journey in the cannabis industry. Your provider will be your e-consultant on each and every step from the application process and beyond.
The new trends in the E-commerce industry have compelled eCheck account providers to offer solutions that include full service, high-risk experts, and friendly professionals. Providers are competing with each other to become experts at high risk payments.
High risk CBD businesses badly need full accompaniment of online payment solutions. CBD merchants also want echeck processing because it is important for preventing chargebacks. The payment needs of such merchants are many, and most providers do not offer solutions for them.
Selecting the correct account provider
Unfortunately CBD companies do not have a big selection of merchant service providers. A few of these providers ask expensive fees or provide inadequate assistance and other providers do not boast the required openness. Therefore, you must be cautious and picky if you want to get the top provider that will be able to offer you continuous support to help grow your company.
If you are looking for payment processing services for your CBD business, please complete the short online application form and a customer service representative will contact you back within 24 hours.