The 2018 Farm Bill ushered in a new era by legalizing hemp-based cannabis products at a federal level, creating opportunities for emerging enterprises. However, steering a CBD venture is no simple feat, given its nascent legal status. Operating within the CBD domain means deciphering a labyrinth of rules, legal frameworks, and challenges. Among these challenges is the realm of payment processing: for CBD sellers online, securing a payment processor open to cannabis-centric businesses can be a puzzle. Fortunately, the cannabis sector is on an upward trajectory. As societal misconceptions wane, payment processors are progressively warming up to sectors once viewed with skepticism. Platforms like GETTRX bridge the divide between e-commerce and cannabis, offering insights into the core of CBD payment processing.
The Changing Landscape of CBD Payment Processing
CBD, despite its numerous benefits, has faced regulatory challenges due to its association with cannabis. However, with the legalization of CBD sales in 2018, platforms like Square have opened up to this market. Square’s early-access CBD program allows merchants to sell CBD on their platform, covering all types of transactions – in-person, online, in-app, and virtual terminal sales. However, it’s essential to note that Square ensures all products sold on its platform are under the THC threshold, and the program is still in its trial phase.
The Importance of a Thorough Merchant Account Approval Process
When applying for a CBD merchant account, it’s crucial to ensure that the payment processor thoroughly underwrites new accounts and performs enhanced due diligence. Instant approvals might seem enticing, but they can lead to unforeseen complications. If a business doesn’t consistently meet the processor’s guidelines, their account could be frozen or terminated.
The Role of Sponsor Banks
A payment processor’s ability to offer CBD merchant accounts largely depends on their sponsor bank’s risk tolerance. Sponsor banks handle various activities, including ensuring business owners receive their money and that card brands and issuing banks get their share of interchange fees. It’s essential to have confidence in all parties responsible for facilitating the transaction.
Staying Updated on Regulations
Given the evolving nature of the CBD industry, it’s imperative for processors to stay updated on federal, state, and local laws. Processors need to be experts in CBD regulations and legislation to guide merchants on staying compliant.
Transparent and Competitive Rates
Some processors might take advantage of CBD businesses by charging high fees or employing pricing tricks. It’s essential to partner with a processor that offers transparent pricing with no hidden fees.
Surcharging or Cash Discounting Programs
Programs like cash discounting and surcharging can help offset processing fees. For instance, Clearent’s Empower program allows businesses to offset credit card processing fees by passing along up to 4% of processing costs to customers.
Omni-Channel Solutions and Forward-Thinking
To grow, businesses need to meet customers wherever they are – in-store, online, or at events. Not all CBD payment processors can handle payments across all channels. Additionally, as the CBD industry evolves, processors should expand their programs and technology accordingly.
Related Article: The Cannabis Industry in 2023: Key Statistics and Trends
back to menu ↑Why do some Payment Processors consider CBD High-Risk?
Products containing CBD with THC are categorized as high-risk by conventional processors because they present an intricate situation due to the legal discord between state and federal regulations. This stark legal distinction heavily regulates THC products. Selling CBD online introduces challenges in ensuring the absence of illicit items in shipments. To be eligible for a merchant account, products must contain less than 0.3% THC.
Mistake CBD merchants make when searching for payment processing solutions?
Many merchants often fall into the trap of searching the internet and selecting the first payment processor that appears, without assessing whether they are the right fit for their needs. When selecting a payment processor for your CBD venture, it’s imperative to confirm their capability in managing high-risk transactions.
Easy ways for CBD Merchants to streamline their payment processing online?
Ensure your products have valid and updated lab reports, with a certificate of analysis for each listed item. Include comprehensive ingredient labels and ensure your billing descriptor matches the business name on your URL. Exclude products like flower, loose items, seeds, and pre-rolled goods, including delta 8 – 10 with THC levels surpassing 0.3%.
Anticipating challenges to CBD merchants changes to the Farm Bill on September 30, 2023
The farm bill may increase the allowable THC amount to 1%. This is just a speculation at this time, however high-risk processors will make the necessary adjustments to support their merchants.
How CBD Merchants can Help Offset Processing Costs?
CBD merchants can offset processing costs by signing up for cash discount programs. CBD businesses have the opportunity to manage processing expenses by enrolling in cash discount programs. These programs enable businesses to address merchant service fees, which pertain to the charges incurred for processing credit card transactions.
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Why Opt for GETTRX for Your CBD Transactions?
Within the intricate realm of CBD, GETTRX stands out as the top pick for those prioritizing safety, assurance, and in-depth knowledge. More than mere processing, GETTRX grasps the subtle intricacies of CBD, ensuring every transaction aligns with compliance, remains safeguarded, and is executed seamlessly. GETTRX’s expertise in navigating high-risk sectors, especially CBD, is commendable. They provide specialized solutions for those bold enough to tackle the nuances of such industries. Their unwavering dedication to clarity sets a benchmark, guiding you to make informed choices for your enterprise. Additionally, leveraging GETTRX Zero can turn your network into revenue! For each merchant you introduce, GETTRX rewards you with a slice of their transactions, consistently, throughout the account’s existence.
Conclusion
Navigating the world of CBD payment processing can be challenging, but with the right knowledge and partners, businesses can thrive. It’s essential to do thorough research and find a partner that understands the unique needs of the CBD industry.
Related Article: Is CBD Good for Post-Workout?
