More and more CBD merchants want to offer their customers a way to pay for their CBD products with a credit card either in-store or online. We get the appeal. Not only are credit cards safer and more secure than cash, but it is also convenient for your customer. Not to mention, consumers tend to spend up to 83% more when using a credit card vs using cash.
CBD businesses (or any business, for that matter) can’t just buy an EMV terminal off of the internet and start running credit cards. Credit card processing just doesn’t work that way. Businesses need a merchant account to make it possible for money to be exchanged via credit card .
The problem CBD merchants are encountering is related to finding a bank or credit card processor that will work with them. It can be very difficult to find a payment processor that will work with CBD vendors, won’t charge an arm and a leg, or won’t drop your merchant account without warning.
Why is it so hard to find a CBD payment processor?
CBD can be derived from hemp or marijuana, and it depends on where the CBD is derived from and the resulting level of THC found in the CBD. In general, hemp-based CBD is legal in all 50 states because it contains negligible amounts of THC. Marijuana-based CBD is not legal in states where marijuana is not legal due to the amount of THC that could be present.
Currently, there is legislation in the works to legalize marijuana nationally. As of the moment, the power to make the decision to legalize marijuana and remove it from the controlled substance list belongs to the individual states.
Banks and merchant service providers don’t want to have to wade through all the red tape that surrounds CBD, hemp, or marijuana. Many merchant account providers just say no in order to protect themselves from potential headaches and legal issues.
CBD merchants find themselves having to fight an uphill battle due to the murkiness of legality in their state. States currently have differing standards on cannabis products they allow.
And if a CBD merchant is lucky enough to find a CBD payment processor, they are often charged hefty fees or just suddenly dropped as a merchant account. Paypal is notorious for dropping accounts and even holding funds instead of releasing them to the merchant.
A CBD merchant account is a retail business account that enables them to accept credit cards as payment for CBD products. Every business has to have a merchant account in order to receive payments from the consumer’s credit card. If they want to accept credit cards payments online, they will also need a payment gateway.
Many entrepreneurs go to their bank to try and secure a merchant account, but that doesn’t generally yield the best results. There are very few banks that will accept CBD business.
You don’t have to go to your bank to secure a CBD merchant account. There are other viable (most likely better) options. There are credit card processors out there who specialize in high risk merchant accounts for CBD, and know how to navigate the legal ins and outs.
What is the best CBD payment processor?
The best CBD payment processor is the one who treats your business as a legitimate business. They will take the time to listen to you and find the solution that’s best for your individual needs.
No matter who you go with to process your CBD payments, you should look for payment processors that
Have experience with High Risk businesses
Have experience with CBD Businesses
Have experience with online stores and can offer a CBD payment gateway
Low monthly minimums (Shift’s is only $25 a month)
No rate increases
Accept major brands
Clear terms and conditions
Why does it cost so much to process CBD payments?
Accepting credit cards as payment involves several parties, and they each charge fees for their services. The banks charge fees, the credit card companies charge fees, processing companies charge fees. Everyone wants a piece of the pie. You just want to pay the lowest price.
Many CBD oil merchant account providers will charge high fees because they know you are desperate for an account. And some CBD payment processors will claim that they have competitive rates when they actually have very high rates. It’s important for you to do your research and ask questions about fees. Once you start pressing about swipe fees, batch fees, monthly fees, monthly minimums, and all the other fees, you’ll often find that the bank will stop answering your questions.
Does Square accept CBD payments?
Square has begun to accept CBD payments. However, Square’s fees for processing are high, and so are best suited for businesses that don’t process that much per month.
Does PayPal accept CBD Payments?
While PayPal claims they accept CBD payments, they are known for dropping CBD accounts without warning.
It doesn’t have to cost you an arm and a leg to process CBD payments.
Here at Shift, we have lots of experience in the CBD industry. We are a CBD payment processor who believes that CBD merchants deserve fair rates (not over-inflated ones). You deserve clear terms and low fees. Ready to see what Shift can do for you? Reach out today to get more information.
We can work with Woocommerce or Shopify; it just depends on how things are set up on your end. The best way to get that set up would be to email info@shiftprocessing.com to get detailed information specific to your situation.
