CBD Merchant Account Service Specialists

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To say the CBD industry is blazing would be an understatement. U.S. consumer sales of cannabidiol (CBD) will surpass 2.5 billion by 2023according to Statista. If you are the owner of a CBD business, you must be working with a payment service provider who specializes in CBD payment processing/merchant accounts.

The CBD industry is considered high-risk as it is currently not regulated by the FDA as a dietary supplement. Payment processors and banks understand this, making it hard for CBD merchants to acquire a merchant account for CBD.

At Corepay, we understand how frustrating it can be when applying for a CBD payment processing solution. Not only do we boast two decades of high-risk credit card experience, but we also specialize in the CBD industry. Corepay’s top priority is to get your business approved and make sure you stay approved.

We provide CBD merchant accounts for the following:

cbd industries we work with

As the CBD industry expands and encompasses new products, Corepay works diligently to maintain proper service and provide exceptional service to our clients.

Corepay offers the following for CBD merchants:

  • Fast CBD account approvals with 24-72 hours
  • No application, annual, or set up fees
  • Risk mitigation through Order Insight by Verifi
  • Chargeback alerts
  • Rates as low as a blended 2.95%

How To Apply For A High-Risk CBD Merchant Account

When looking for CBD credit card processing, you must ensure compliance with all regulations. CBD merchants who are selling CBD/hemp-derived products with THC levels of .3 percent can apply for their merchant account.

It is important to note that Corepay cannot provide a merchant account for any cannabis products containing cannabidiol, cannabinoid, THC over .3 percent.

By filling out an application with Corepay, we can quickly get you approved and processing CBD transactions in no time.

You will need the following information when applying:

  • A voided check
  • A valid government I.D. (driver’s license)
  • Six months of processing statements, proving chargeback performance.
  • Articles of Incorporation
  • SSN
  • Fulfillment Agreement
  • Secure and fully compliant website

*While we cannot guarantee your approval at Corepay, we can promise that we will do our best to get you approved and processing transactions swiftly.

Why Are The Best CBD Merchant Accounts Considered High-Risk?

Since CBD is used for medical reasons and has not been approved by the FDA, this automatically implies banks and payment processing providers are taking on additional risk.

CBD is often used as an alternative to treating epilepsy, cancer, sleep deprivation, and anxiety. With this being said, there has been insufficient medical evidence to back up these claims.

According to Healthline, there is some evidence that cannabinoids can decrease the size of tumors. However, Healthline also states that it is far too soon to say that CBD is a safe and effective treatment for cancer in humans.

CBD merchant accounts are deemed high-risk by banks and payment processors for the following reasons:

  • Not approved by the FDA
  • State legislation
  • Reputational concerns
  • Chargebacks – Customer satisfaction can at times be questionable and CBD merchants can have a lot of card-not present transactions (CNP)

Lack Of FDA Approval

This is a major concern for CBD merchants when processing credit card transactions for CBD purchases. The only FDA-approved drug that includes CBD is Epidiolex. Epidiolex does not contain any THC.

Epidiolex contains a highly purified form of the drug substance CBD for the treatment of seizures.

The FDA has gone after several CBD companies for making statements regarding the medical benefits of CBD. 

As THC levels in CBD can vary, this leads to a risky position for payment processing providers.

If a CBD company is caught selling CBD with higher levels of .3 percent THC, the payment service provider risks taking a significant financial hit and reputational hit as well.

 CBD Legislation Issues

Contrary to popular belief, CBD is not yet legal in all 50 states, and this is a primary concern for banks/processing companies. Currently, CBD that contains any levels of THC is banned from Idaho completely.

CBD product possession in the following states requires patient registration:

  • Arizona
  • Arkansas
  • Deleware
  • Hawaii
  • Iowa
  • Louisiana
  • Mississippi
  • Utah
  • Montana
  • New Hampshire
  • North Carolina
  • Pennsylvania
  • Wisconsin
  • Rhode Island

Reputational Concerns

The fact that the FDA does not approve CBD makes it a significant risk for payment providers. A bank or payment processor’s reputation can be on the line when working with CBD companies, as there are still many unknowns.

Stories like Summit Labs, in which they sold a product that contained lead, cause a lot of uncertainty for payment service providers.

CBD is similar to the adult industry when it comes to reputational risks; however, CBD also introduces an element in which there are unknowns regarding health.

A CBD merchant that sells mostly CBD vapes or ingestible products may be viewed differently from a CBD merchant that deals mainly with external CBD oils, as vapes can introduce another dangerous element.

CBD Chargebacks

Chargebacks in the CBD industry differ from other high-risk industries such as online dating or adult content. Generally speaking, there aren’t as many chargebacks in the CBD industry, but they still exist, especially with online CBD stores.

To grab a quick understanding of chargebacks, a chargeback is a charge returned to a credit card after a customer successfully has disputed a transaction from their statement.

In the CBD industry, this is most prevalent with CBD subscription boxes. Chargebacks are commonly seen when subscription services are presented.

How To Find The Best CBD Credit Card Processing Solution

holding cbd

Finding the best CBD credit card processing solution is challenging; we get it. The fact that you are reading this article now tells us that you are doing your research.

We recommend that CBD merchants fill out a few applications, compare rates, and have conversations with payment service providers.

Corepay would love to have the opportunity to work with your business, and we can guarantee highly competitive rates and outstanding service to our CBD clients.

Here are some essential points to note with your merchant service provider:

  • Pricing: Keep in mind that with any high-risk merchant account, you are going to pay more in fees. At Corepay, we can offer a more affordable interchange-plus model as well as the traditional merchant discount rate. With this being said, you can expect higher monthly and annual costs, as well as a rolling reserve for your CBD merchant account. The rolling reserve is meant to protect acquirers from instances of fraud, friendly fraud, and unscrupulous customers.
  • Account Approval: Account approval time can vary depending on the industry. Be wary of merchant services that approve you instantly. This means the account was approved without an underwriting process.
  • Credit card processing hardware: Should your business be conducted online and at a brick and mortar store, you will need a credit card terminal or mobile processing system for payments. The terminal should be capable of accepting EMV payments and contactless payments as well. You can get hit with non-compliance fees for not having an EMV compliant processing machine with some payment service providers.
  • Contractual Agreements: CBD merchant account contracts can vary from one provider to the next. Some payment service providers will require that you pay a steep early termination fee (ETF); however, this can also be a negotiation point.
  • Support: eCommerce support can be crucial for CBD processing. At Corepay, we can set you up with our reliable payment gateway, Solidgate. With Solidgate, merchants can blacklist certain zip codes where CBD is not permitted by law.
  • Customer Support: It is of utmost importance that merchants work with a payment service provider with outstanding customer support. 

*While we cannot guarantee your approval at Corepay, we can promise that we will do our best to get you approved and processing transactions swiftly.

Are CBD Credit Card Processing Solutions Expensive?

Generally speaking, merchants will pay more for CBD payment processing as they fall into a high-risk category.

At Corepay, we offer our CBD merchants highly competitive rates, and we also waive annual fees, setup fees, and application fees. We believe a good payment processor will earn your loyalty rather than extort it with hidden fees.

Hemp Merchant Account Solutions

Hemp merchants should follow the same guidelines as CBD merchants when applying for a merchant account.

Low-risk merchant service providers will not typically process hemp sales, and if they do, they can still terminate your account.

Corepay can quickly get you started with a hemp merchant account. Hemp is considered part of the high-risk industry, just like CBD, for the same reasons.

Importance Of Keeping Your CBD Merchant Account In Good Standing

Like any business, keeping your merchant account in good standing is crucial to running a successful business.

Having an honest and trustworthy relationship with your payment processing provider is key to moving your business forward. Avoiding chargebacks and adhering to THC levels’ laws are the two principles that CBD merchants can follow to keep their accounts in good standing.

Here’s a thorough list of what merchants can do to keep their accounts in good standing.

tips to maintaining merchant account
  • Process a high, but steady sales volume, in accordance with your MPA.
  • Maintain a solid transparent history with banks and credit card processors.
  • Keep settlement accounts in good standing.
  • Limit chargebacks with strong customer support. Our partner CB-Alert will greatly reduce friendly fraud.
  • Stay current on all Federal and State Regulation changes. Notify processing partners of any potential issues.
  • Maintain THC levels under .3 percent.

Do Paypal, Stripe, Or Square Accept CBD Sales?

As of 2023, Paypal does not accept CBD salesWhile Paypal is undoubtedly not a bad option for specific industries, they do not work with high-risk industries. Paypal is a quick option in which merchants can quickly start processing payments; however, merchants can run into severe consequences once Paypal reviews their account.

What happens is that CBD merchants will initially start making sales and processing transactions, in some cases up to several months, and then Paypal’s underwriters audit their account.

They deem the account to be high-risk, and they terminate the merchant’s account, withholding funds in the account for up to 180 days after termination.

Why Choose Corepay

At Corepay, we specialize not only in CBD merchant accounts but in high-risk merchant accounts. We understand what it takes to get CBD merchant accounts up and running and how to keep them growing.

Corepay offers completely customizable credit card processing options, and we can also get you approved in as little as 24 hours upon submitting your application.

Your success is our success, and we can assure you that we can be your greenlight to CBD payment processing solutions.