Does Paypal Accept CBD Merchants?

Last Updated on July 7, 2023 by Corepay

CBD rapidly became a powerhouse industry when they were legalized in 2018. Since then, retail and online CBD shops have popped up left and right. With this came entrepreneurs ready to invest and take their stores to the next level. 

The next step they had to make was finding a payment processor. With Paypal being such a popular option, many found themselves setting up a Paypal account to begin processing payments for their CBD products. 

This brings us to this article’s point: Can CBD shops sell their products using Paypal? Unfortunately, the quick answer is no; Paypal does not accept CBD payments. 

Let’s take an in-depth look at why Paypal doesn’t accept CBD payments and what merchants can do instead of relying on Paypal.

Paypal Merchant Accounts For CBD

Setting up an account with Paypal is fast and easy to do. We get it. For this reason, many high-risk businesses have created Paypal accounts, assuming any company could accept payments with Paypal. 

CBD was one of those industries in the last few years that exploded in growth, which found many companies opening accounts with Paypal. Unfortunately, after a few months, many of these companies had their accounts frozen, and they had to scramble to find another solution quickly.

We’re here to help you before this happens. Paypal is fantastic for simple, low-risk industries, but any high-risk business is 100% against their terms of service, ultimately allowing them to freeze your account.

Paypal’s CBD Policy

Paypal clearly states on its restricted business page that it does not accept CBD merchants or any industry labeled high-risk. We have a comprehensive page on high-risk payment processing that tells you everything you need to know.

Why Does Paypal View CBD As High-Risk?

It’s important to note that it’s not just Paypal that views the CBD industry as high-risk. It’s every bank and credit card processor. 

The main reasons are the following:

• Chargebacks
• Health concerns
• Legalization
• Reputation

Chargebacks are often higher with CBD, as many customers can claim the products did not work as intended. On top of this, there is a lot of competition in the industry, so it’s not uncommon for other brands to try to sabotage your brand by saying your products are ineffective.

Does Legal Status Affect Decision For Paypal To Not Accept CBD?

Unfortunately, CBD is still considered high-risk regardless of legality. This means typical banks and processors will not accept this type of business.

Alternatives To Paypal For CBD

CBD is one of the most demanding industries to place when it comes to payment processing. For this reason, you will need to find a provider specializing in CBD and high-risk verticals in general. If they don’t, they will not be able to service your business.

At Corepay, we believe we offer some of the best CBD merchant accounts currently in the space. We do this by taking advantage of our partner product, CB-ALERT, to mitigate chargebacks, ultimately saving you money on processing fees.

What Happens When A Merchant Violates Paypal’s CBD Policies?

Whether a merchant purposely violates Paypals policies or does so by accident, the end result is the same: Paypal will freeze or terminate your account to perform an audit.

During this process, your account will be frozen for up to 180 days, leaving you with no way to access your funds. If this has happened to you, we strongly advise filling out several applications, including one with us, to find you reliable payment processing, so you aren’t missing out on sales.

Opening Up Your CBD Merchant Account With Corepay

Let Corepay set you up effortlessly with your personally tailored CBD merchant account, which you control. We are confident we can deliver optimal pricing, lower your chargebacks, and help you grow your business to the next level.