In the wake of the 2018 Farm Bill, the horizon for hemp-derived cannabis products expanded, providing nearly limitless opportunities for companies and brands in the CBD industry to expand what they can offer their customers. However, given the fluctuating legal status of cannabinoids and the regulations surrounding them, navigating a path to prosperity within this new regime has not been easy. Amidst this complex legal maze, one key hurdle stands out: payment processing. For online CBD suppliers, finding the right payment processor for cannabis commerce has been an uphill battle. But the winds are shifting, and some payment processors are paving the way toward a more harmonious future for cannabis and e-commerce.
Which merchant account handles payments on the CBD website?
Finding a merchant account or payment processor to simplify the transaction process can be frustrating, especially if you're not familiar with the world of e-commerce. The good news is that more and more payment processors are jumping on board with this trend, but why?
The 2018 Farm Bill changed everything for the cannabis industry. Currently, hemp-derived CBD products are considered legal under federal law. Since then, some states have passed their own restrictive laws targeting specific cannabinoids, and others may choose to do the same. But for the rest of the country, the Farm Bill stipulates that cannabis products can be legally produced and sold as long as they are derived from hemp and contain less than 0.3% THC by dry weight.
This doesn't mean cannabis is completely legal, but the Farm Bill brought about enough changes to allay some concerns in the financial industry. While legal uncertainty has kept financial institutions away from the cannabis industry, some companies have become trusted partners for CBD brands. This registered merchant account provider works with major credit card networks to enable CBD businesses and their customers to process payments online and offline.
Payment processors like GETTRX, Inovio, Square, and Bankful are experts in CBD maintenance and are equipped to handle the legal complexities of processing high-risk industries like hemp, making payments easier. It's a great option if you're looking for a way to do that. transaction process.
But how do CBD companies choose which payment processor to work with?
What to look for in a CBD payment processor
Choosing the right merchant account and payment processor is essential to keeping your business running smoothly and providing a seamless and intuitive experience for your customers. Here's a summary guide on some important factors to consider.
You want someone on your side, so you need to prioritize high-risk expertise. Being familiar with a high-risk industry can give you peace of mind as you navigate the ups and downs of the complex CBD industry. You’re worth as much as your worst customer, so when dealing with CBD, it’s always to your advantage to find a payment processor with a good reputation and a good track record in the industry. Being transparent about your needs with a potential payment processor will help set expectations. Also, using the term “high risk” is always a way to break the ice. This helps set the scene and gives reputable processors context and reassurance about your intentions and product. Rather than rushing to the most well-known payment processor, take your time and consider the balance of possibilities. Some processors may be popular, but failure to meet strict underwriting standards can lead to unexpected shutdowns. Why don't all payment processors work for cannabis?
If you are deeply involved in the world of cannabis, you are probably already aware that navigating the world of CBD is not an easy task for processors. This is a case where two very complex and regulated industries have to find common ground, but CBD products often contain THC, making it a high risk for many mainstream payment processors. It is considered.
Not all payment processors are up to the challenge due to compliance complexities, conflicting federal and state laws, product safety concerns, laboratory reliability, and ambiguous federal regulations. Despite these obstacles, companies like GETTRX are addressing these complex issues and becoming trusted partners for CBD brands.
Solving these complex problems is not easy. Roberto Sato, president and CIO of GETTRX, understands why some payment processors are reluctant to get involved. “Typically, processors classify CBD merchants as high risk, especially those where the card is not present.” Mr. Sato. “This classification is primarily driven by legal and regulatory compliance concerns, the rigorous due diligence performed during onboarding and risk oversight by ISOs, processors, and sponsoring banks, as well as interactions between federal and state laws and regulations. Aspects such as product quality, safety and overall reputational risk further complicate this assessment.”
So what can CBD companies do to ensure their products stand up to the test of payment processors? Basically, making it easier for payment processors to see you as a partner rather than a risk It's a purpose. Things like registering as a high-risk entity with Visa and MasterCard and allocating $500 to each association will signal to payment processors that CBD companies will be more likely to work with them.
“Make sure your products include valid and up-to-date lab reports, including certificates of analysis for each item listed,” says Sato. “Include a comprehensive ingredient label and make sure the claim descriptor matches the company name on the URL. Excludes products such as pre-roll products that include.
