CBD Payment Processing
Merchants operating in the Cannabidiol (CBD) and Hemp Oil industries have more difficulty than most merchants in other businesses when applying for eCommerce payment services. Most payment processors view CBD as a high risk due to its association with the medical marijuana (MMJ) industry. Many times merchant accounts for CBD businesses are shut down unexpectedly, preventing new transactions and freezing pending payments. Fortunately, merchants have a safe option for accepting payments through a merchant services provider that specializes in these hard to place industries.
Since hemp was removed from the FDA list of controlled substances in 2018, financial institutions have been more receptive of these businesses. While most states in the USA have approved some form of cannabidiol or medicinal marijuana, the Federal government still has not given CBD their seal of approval. This lands the CBD and Hemp industries on to a prohibited industries list at most payment processors today.
Businesses partnering with Allied Payments will learn that CBD merchant account services are designed for and set up with the CBD industry in mind. Most payment processors working in the high risk industry offer generic payment solutions that carry high costs with excessive red tape. Having a CBD specific account provides businesses with stability in the merchant services along with more competitive rates and better payout schedules. Helping businesses with CBD friendly merchant account services remains one of Allied Payments goals.
What is CBD?
A byproduct of cannabis, Cannabidiol has become a hot topic issue due to its medical benefits and legal status. Though illegal on a Federal level in the USA, many of the states have legalized or partially legalized the sale and use of CBD. This has created an environment where restrictions and guidelines vary from state to state and even county to county.
Because CBD does not have to contain Tetrahydrocannabinol (THC), the sale of Cannabidiol enters the grey area of legality. THC is the hallucinogenic ingredient of cannabis when is found in quantities smaller than 0.3% allows it's classification to be that of Hemp. This allows for the sale of CBD to occur in most states without the risk of violations.
CBD can be taken by users by either smoking, vaporizing or using as an aerosol spray. While for most medical purposes it is illegal to make any claims as to its benefits, CBD has been used in some FDA-approved drugs. An increasing number of products, from coffees and teas to candies and snacks, are being sold in various states infused with CBD.
Until the federal government lifts the restrictions on CBD, it will remain legal on a state by state basis. While the sentiment of many citizens has become increasingly favorable, more medical testing will be required to make any changes on a federal level.
CBD Merchant Account Types Accepted
There are many different types of CBD businesses, all of which have guidelines that need to be met for CBD merchant account approval. Merchants will be required to comply with all local, state and federal laws for the sale and distribution of CBD products. Federal law dictates that Cannabidiol and Hemp-derived CBD must contain less than .3% THC weight to not be classified as a drug by the FDA. Merchants will also need to ensure that consumers are over 18, requiring the use of age verification software for online orders.
Our financial networks have a strong knowledge of the CBD industry and many of the products offered. Some of the Cannabidiol product types we can provide CBD merchant account services for include:
- CBD Beauty Products
- CBD Creams
- CBD Edibles
- CBD Gummies
- CBD Sprays
- CBD Supplements
- CBD Terpenes
- CBD Tinctures
- CBD Vape Oils
- CBD Vitamins
- Hemp Oil
If your CBD or Hemp product is not listed, contact one of our CBD payment professionals for more information.
CBD Merchant Account Services Available
Businesses today in the CBD industry have more options than before. As payment processors becoming increasingly comfortable with the products, more features are available. What was strictly a cash-only business has opened up to online sales and distribution. CBD merchants are able to accept payments in most locations by using:
- Credit Card Terminal
- Payment Gateway
- Virtual Terminal
- Check Processing
Selling CBD has traditionally been done through a retail storefront, primarily smoke shops or vape shops. Many times these businesses were unable to accept credit card for the Cannabidiol or Hemp Oil, thus requiring cash-only sales. With the loosening of restrictions, payment processors allowed credit and debit card sales, but only swiped transactions. Today, most merchants with CBD stores are able to use their credit card machines for a variety of transactions, including card-not-present.
As soon as payment processors began giving the approval for card-not-present transactions, online sales began surging. Payment gateways that allow CBD and Hemp Oil to be sold through their networks experienced significant spikes in volume. Payment processors work to verify that the gateways are fully compliant with the PCI standards. Helping merchants eliminate the risk of fraud or other theft from occurring through their payment networks.
Businesses accepting orders over the phone or through mail order can use either a credit card terminal or a virtual terminal. Virtual terminals are usually an added feature as part of a high risk payment gateway program. A virtual terminal is ideal for e-commerce businesses since it handles all online and phone orders in one location. By condensing sales into one portal, transaction management becomes fast and simple.
Another popular choice of merchants is the use of CBD echeck processing services for online and retail sales. While credit cards of the most commonly used methods for making payments, some customers will opt to pay with echeck. Businesses also offer this service in addition to a CBD merchant account to help lower their fees for accepting non-cash payments online or in a storefront.
Trouble with previous Hemp Merchant Account Services?
Many merchants launching an online CBD business have opted to use Stripe or PayPal to accept payments online. While these payment aggregators accept many types of businesses, they will not accept CBD businesses. Accounts are not closed immediately after opening, rather it takes a few weeks to months for their underwriters to check on a business. Once an audit has been completed, merchants will usually be shut down immediately without notice, leaving the business dead in the water.
Considered by most payment processors as a high risk industry, CBD businesses will want to partner with a merchant services provider that specializes with Cannabidiol. The concern from payment processors are not like other businesses where chargebacks or fraud create problems. Rather, payment processors are concerned about the legal implications they might face for allowing a Schedule 1 drug to be sold through their network.
Businesses selling CBD will continue to experience problems with payment processors until the FDA recognizes CBD as a medical product. With most states having CBD different laws, it proves to be too difficult for some processors to manage. Businesses that properly partner with a specialized processor will know that their hemp payment processing does not risk the complications of other payment solutions. Merchants that start operating without a CBD payment processor will be declared as non-compliant with the payment card networks in a relatively short period.
Merchants found to be non-compliant with their processor face account closures, held funds and possible fines. The best solution for CBD businesses that do not want problems is to work with a specialized payment processor. At Allied Payments, our team understands CBD and only processes payments through our authorized CBD network. Our focus is to help eliminate the potential for problems with our client's CBD merchant account services.
CBD Merchant Account benefits with Allied Payments
The benefits for businesses of partnering with Allied Payments extend beyond the quick CBD merchant account approvals. We work with our merchants to provide the resources and tools needed to build a successful business. While most payment processors will not touch the CBD industry, we have set out to become a leading CBD processor. Offering our partners the same features that general e-commerce businesses utilize, we are able to lower credit card processing costs. With a variety of fraud scrubbing, chargeback prevention, and compliance monitoring, we lower our risk while helping businesses grow.
As a competitive and advanced payment processor, we offer our CBD merchants:
- 24-7 Customer Support
- Complete Online Reporting
- Online Transaction Management
- Ability to Capture Credit Card Information
- Fraud Protection
- Chargeback Prevention
- Full PCI-Compliance
Start Accepting CBD Credit Cards Today!
Merchants in the CBD industry looking for reliable and affordable CBD merchant account services are encouraged to contact Allied Payments. We integrate with; WooCommerce, Shopify, BigCommerce, Ecwid, LimeLight, Magento, Opencart and Prestashop to name a few. Our team of CBD professionals can help businesses quickly set up their payment processing at rates below our competitors. Our team will be happy to answer any questions and address any concerns about your company or our CBD services.