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Ultimate Guide to CBD Payment Processing for Merchants

We are now in the era of legal hemp. What a journey it’s been, right? Gosh I remember the days of when people thought you could get high from smoking a hemp t-shirt.

We’ve come a long way, haven’t we? There are so many opportunities to work with hemp.

Whether it’s the cannabinoid side of things, or hemp seed products, or hemp fiber based goods, there’s so much potential for this plant still.

In spite of what many people might think, there’s still a great opportunity to have a thriving CBD or hemp business.

Companies selling hemp-derived CBD products are sprouting like mushrooms after a rain, with the industry projected to reach $16 billion in revenue by 2025.

We’ve been helping grow hemp companies for the last 19 years, and at one point banking and payment processing wasn’t an issue… but ironically, after the legalization of hemp things got weird.

Banks and payment processors got all scared, and immediately lumped hemp with medical or recreational cannabis, and were not willing to work with hemp companies, even though it was totally legal on a federal level.

However, things are slowly changing…

In this article I’m going to share with you what I believe is the most hemp and cannabis friendly payment processor on the market, along with some other common questions about how to prevent issues from happening when it comes to your processing needs.

Like I mentioned, there is still massive potential for hemp entrepreneurs to do very well for themselves, and be a part of the solution to make this planet cleaner, healthier and more abundant.

While this growth brings immense opportunities, it also presents challenges, especially in terms of cannabis and CBD payment processing.

The 2018 Farm Bill’s introduction has led to a shift towards high-risk merchant accounts which can accommodate unique needs of CBD companies.

This necessity has grown even more pressing as CBD’s popularity continues to rise in both physical and online stores, spanning from CBD oils to balms.

The CBD therapeutic sector alone is expected to clock in at a staggering $9.30 billion in 2026, growing at a CAGR of 27.4%

However, foraying into this lucrative yet high-stakes sector warrants a comprehensive understanding of compliant business transactions.

Payment processors are often wary of partnering with CBD companies, making it essential for merchants to secure a high-risk merchant processing company to ensure smooth sailing.

So let’s dive in deeper…

Key Takeaways from this Article

      • CBD payment processing is critical due to the high-risk nature of the industry and the growth of both physical and online sales of CBD products.

      • The 2018 Farm Bill has highlighted the need for high-risk merchant accounts that can cater to the specific needs of CBD companies.

      • Despite the challenges, CBD merchant processing offers immense growth opportunities with the CBD therapeutics sector alone projected to reach $9.30 billion by 2026.

      • Securing a reliable CBD merchant processing company is a crucial step for CBD companies to operate smoothly amidst ever-changing regulations and legalities.

      • A Hemp and CBD payment gateway needs to be trustworthy and capable of handling intricate CBD transactions securely and efficiently.

    Choosing the Best CBD Payment Processor for Your Business

    Choosing the Best CBD Payment Processor for Your Business

    As the worldwide Cannabidiol (CBD) market continues to flourish, projected to surge from $4.9 billion in 2021 to $47.22 billion by 2028, finding a trusted and secure CBD payment processor for your business operations becomes ever more crucial.

    Navigating the complexities of high-risk transactions, suitable processors must offer ease of integration with current business platforms, ensure seamless API integration, and provide robust POS (Point of Sale) availability.

    Thankfully we’ve found the ideal partner that can provide all of these solutions and more. And as I mentioned previously, with over 19 years of experience in the hemp industry, we know what to look for.

    The decision of selecting the right processor can mean the life or death of your company, to any hemp or CBD business aiming to harness the growth potential of this burgeoning industry.

    Factors such as transparent fee structures, reasonable contract conditions, and robust customer support are vital considerations when disputes or chargebacks arise.

    Some of the recognized players in the industry, such as Inovio, Bankful, and Merrco Payments, stand out for their unique attributes, however the company that stands head and shoulders above them all is Brother Processing Solutions.

    At Brother Processing Solutions (BPS), they are redefining the hemp industry’s standard for credit card processing in Canada and the United States.

    With a decade-long legacy in the rapidly evolving cannabis space, they have built their reputation by catering to licensed cannabis dispensaries, accessories stores, e-commerce CBD websites, and a diverse range of cannabis and hemp businesses.

    What sets them apart is their commitment to building lasting relationships with their clients, reflected in their remarkable 96% annual client retention rate.

    They pride themselves on offering the industry’s lowest processing rates with transparent pricing models, ensuring their customers never feel locked into a contract.

    They surpass industry standards with their POS technology, focusing on safety, security, and speed, and they guarantee fund deposits within 1 business day.

    Their 24/7 availability is a testament to their relentless pursuit of client satisfaction. In a world where banks and credit card providers dominate, they are the trusted alternative, constantly working to disrupt the status quo, reducing rates and elevating service standards.

    Choose Brother Processing Solutions, the reliable, customer-centric solution to your credit card processing needs.

    Let’s further delve into the considerations for choosing the best CBD payment processing, keeping these factors in mind.

    Setting Up a CBD Merchant Account Hassle-Free

    Setting Up a CBD Merchant Account Hassle-Free

    As a thriving business in the CBD industry, it’s essential for you to grasp the foundations of setting up a merchant account specifically catered to your needs.

    Navigating through the complexities and high-risk attributes of the industry doesn’t have to be a daunting task.

    Let’s go over the steps involved in getting your CBD merchant account up and running.

    Setting up a CBD Merchant Account

    Steps to Apply for a CBD Merchant Account

      1. Choose a merchant services provider well-versed in regulatory compliance and understanding of the CBD industry.
      2. Submit your application for a high-risk merchant account with all necessary documentation and information about your business.
      3. The provider ensures compliance with banking regulations, underwriting guidelines, and card brand rules.
      4. Once approved, integrate the merchant account with your business platforms.

    The Importance of a High-Risk Merchant Account for Your CBD Business

    Being labeled as a high-risk industry means CBD businesses encounter challenges that low-risk industries don’t face. 

    Obtaining high-risk merchant accounts for CBD businesses not only helps you sell CBD products without hindrance but also enhances the legitimacy of your operations.

    The secured infrastructure and the ability to manage potential legal alterations are reasons enough to make a high-risk merchant account an indispensable part of your business if you’re planning to sell online as a CBD or hemp merchant.

    How to Get Approved for a CBD Merchant Processing Account

    Although obtaining approval for a CBD merchant account might seem arduous, a clear presentation of your business information during the application stage can expedite the process.

    Pay attention to potential legislation changes in the CBD and hemp products industry and ensure that your business passes scrutiny by maintaining regulatory compliance.

    Partnering with a processor experienced in supporting CBD merchants is crucial for seamless transactions and longevity of your business.

    Understanding Credit Card Processing for CBD Sales

    Understanding Credit Card Processing for CBD Sales

    Operating in the rapidly evolving CBD industry brings its unique set of challenges when it comes to credit card transactions. 

    Understanding these challenges allows CBD businesses to navigate their way through with the least interruptions possible.

    Why CBD sales are considered high-risk for credit card processing

    Firstly, CBD sales are categorically marked as high-risk due to the legal ambiguities and changing regulations by regulatory bodies like the FDA.

    This situation necessitates that CBD merchants align their operations with high-risk payment processors that are well-versed with the CBD marketplace and the inherent risks such as chargebacks and frauds.

    How to Choose a Credit Card Processor for CBD Products or Other Hemp Goods

    Choosing a credit card processor for your CBD business goes beyond just facilitating transactions.

    A payment processor for your CBD products should have valuable experience navigating the high-risk sectors, proven capability of handling CBD transactions, and strict adherence to compliance with industry regulations. 

    Engaging processors that offer high-risk merchant accounts tailored for CBD sales can prove to be instrumental in long-term business sustainability.

    Selection Factors Description
    Industry Experience Prior experience working within high-risk sectors
    Transaction Handling Demonstrated capability to manage CBD transactions
    Compliance Standards Adherence to regulatory standards specific to CBD sales

    Navigating CBD credit card processing regulations and compliance

    Keeping up-to-date with state and federal laws related to CBD is not just a necessity, it is a survival tactic for businesses in the hemp or cannabis sectors.

    Ensuring your business stays compliant with these laws wards off potential processing disruptions that could severely impact operations – obviously.

    A firm alliance with payment processors extending compliant high-risk merchant accounts fortifies your business against unforeseen regulatory challenges.

    Navigating the Challenges of CBD Payment Processing

    Navigating the Challenges of CBD Payment Processing

    The CBD industry has seen a rapid surge in popularity, driven by the versatile health benefits touted by numerous scientific studies.

    Online CBD businesses encounter unique payment processing challenges due to its high-risk nature and varying state laws. 

    Despite these hurdles, harnessing the growth of the CBD market necessitates comprehensive understanding and tackling of these associated issues.

    Challenges of CBD Payment Processing

    Common obstacles CBD merchants face in payment processing

    Payment processing is a primary subset of holistic CBD merchant services.

    One common obstacle faced by CBD sellers includes securing payment processing companies that can seamlessly handle CBD transactions.

    These companies often hesitate due to the legal complexities and high-risk nature of CBD transactions, potentially leading to losses.

    But that’s what’s so cool about Brother Processing Solutions. They live and breathe all things hemp and cannabis as it relates to payment processing.

    Solutions for CBD payment gateway issues

    To circumnavigate these payment gateway challenges, your business needs a specialized approach.

    high-risk payment processor is much more suited to handle such transactions, mitigating possible complications.

    Their intense experience in the field complements their in-depth knowledge of the intricate working of processing CBD products online.

    Essential services such as a dedicated merchant account and seamless ecommerce applications’ integration are a part of their offerings, thus expanding your online CBD business’s reach.

    Keeping your CBD business compliant with payment processing for CBD

    Another significant issue faced by CBD businesses is ensuring compliance with state-specific laws while managing payment processing.

    Compliance is essential for maintaining operation continuity and legal authenticity, a necessary part of running a successful CBD business.

    Payment processors should, ideally, offer services, including fraud protection and dispute management, ensuring your business interests’ protection against any unanticipated threats.

    Challenges Solutions
    Finding compliant processing companies Opting for high-risk payment processors with experience in CBD transactions
    Establishing dedicated merchant accounts for high-risk business Choosing payment processors offering all-inclusive CBD merchant services
    Staying compliant with ever-evolving CBD regulations Ensuring your payment processor offers services including fraud protection and dispute management

    In summary, soaring above the CBD payment processing challenges requires a strategic selection of suitable processing companies receptive to your business’s high-risk nature and a continuous effort to adhere to the governing laws and regulations.

    Expanding Your CBD Sales with Online Payment Solutions

    Expanding Your CBD Sales with Online Payment Solutions

    In the dynamic landscape of the CBD industry, online sales are becoming a mainstream route for expansion.

    To cater to this growth, utilizing an efficient payment processing platform becomes crucial.

    When integrated with your online platform, a top-tier payment processor can push your CBD business to new heights.

    Integrating CBD Payment Processing with Your Online Platform

    As a business owner, the key to capturing the bustling market of online CBD is integrating a secure and reliable payment processor into your online platform.

    This integration streamlines the transaction process, making it easier for customers to make purchases.

    It also helps in maintaining a smooth operation, managing CBD payments in an efficient, hassle-free manner.

    Best Practices for CBD Online Payment Security and Fraud Prevention

    With the rise of ecommerce, it’s more important than ever to ensure online transaction security.

    A crucial part of maintaining customer trust is implementing robust security measures.

    This includes regular system updates, strong encryption standards, and fraud prevention protocols.

    By giving priority to security measures, you can safeguard both your customers’ information and your business’s reputation.

    Leveraging Shopify and Other Platforms for CBD Payments

    Platforms like Shopify have grown in popularity among CBD business owners due to its ease of use and versatility.

    Shopify for CBD allows you to manage your digital storefront efficiently, from inventory management to accepting secure CBD payments.

    Other online platforms also offer similar services, broadening your options in choosing a platform that best suits your business model.

    Platform Key Features Suitability for CBD Business
    Shopify Inventory management, secure payment processing, website hosting, marketing tools Shopify offers a specialized solution for hemp and CBD products, making it an ideal choice.
    WooCommerce Customizable, built specifically for WordPress, large community support While WooCommerce doesn’t specialize in CBD, they do offer excellent customizability for businesses
    BigCommerce SEO features, integrates with multiple payment gateways, customizable themes BigCommerce is a good platform for businesses looking for a balance between ease-of-use and feature-rich ecommerce solutions.

    Choosing the right online payment solutions can make a significant difference in your CBD business’s growth and revenue.

    By carefully considering your platform integration, implementing security best practices, and leveraging tools like Shopify, you can enhance your customers’ shopping experience and solidify your brand’s online presence.

    What’s great about Brother Processing is that they integrate with each of these platforms.

    Selecting a CBD Payment Gateway for Online & In-Store Sales

    Selecting a CBD Payment Gateway for Online & In-Store Sales

    For CBD merchants aiming for both online and brick-and-mortar sales, selecting the right payment gateway is paramount.

    Given the high-risk nature of CBD transactions, your choice heavily impacts business operational efficiency, customer experience, and your ability to cater to international markets. 

    The selection process involves the evaluation of multi-currency support, seamless business system integration, and a provider’s capacity to manage high-risk transactions.

    With the introduction of multimodal retailing, having a dependable, secure, and versatile CBD payment solution becomes even more crucial.

    Criteria for Choosing the Best CBD Payment Gateway for International Transactions

    When engaging in international sales, your CBD payment processing needs to be capable of accepting credit cards multi-currency processing.

    It’s vital to consider a solution with multi-currency support, as dealing with different currencies widens your customer base and facilitates international transactions.

    With cross-border ecommerce set to reach a staggering $627 billion by 2022, aligning with a CBD payment processing company that can secure and expand your global presence is an absolute necessity.

    Understanding Different Payment Gateway Options for CBD Companies

    Different CBD payment processing companies offer diverse payment gateway options.

    These options differ in their ability to manage high-risk transactions and their compatibility with varying business systems.

    The provider’s experience in handling hemp-derived CBD products, their robust security measures, including anti-fraud systems, and their capability for seamless integration with your existing infrastructures must all be factored into your decision-making process.

    One feature, especially if you’re have a physical storefront, dispensary or boutique shop is to see if the payment processor you are considering working with has a chasless ATM.

    This is especially crucial for cannabis dispensaries since it’s safer and doesn’t require as much maintanance and restocking as a typical ATM system.

    Benefits of a Multi-currency CBD Payment Processing Solution

    A multi-currency payment solution is not simply a handy feature but a crucial tool for CBD merchants intending to operate internationally.

    Offering shoppers the convenience of paying in their local currency significantly enhances the user experience, streamlines the checkout process, and positions your business for growth in new markets.

    Beyond the customer appeal, a multi-currency payment processing solution enhances operational efficiency by simplifying the handling of payments in multiple currencies, providing your business a competitive edge in the rapidly expanding global market.

    FAQ for CBD Payment Processing

    Q: What challenges do merchants face when they sell CBD online?

    A: Merchants looking to sell CBD online encounter significant challenges, primarily due to the legal complexity and the perceived risk associated with the CBD industry.

    This includes finding a reliable payment processing solution, as many traditional banks and payment processors shy away from CBD businesses, fearing regulatory repercussions.

    Getting a CBD merchant account with a payment processor that understands the industry’s nuances is vital for these businesses.

    Q: Why is it important to find a high-risk payment processor that specializes in the CBD industry?

    A: A high-risk payment processor that specializes in the CBD industry (as well as hemp and cannabis) is crucial because these processors have a better understanding of the laws and regulations governing the sale of CBD products.

    They offer merchant services for CBD that are designed to mitigate the risks involved, ensuring that your payment processing is compliant with local and federal laws. 

    This specialization can also prevent scenarios where your payment processor might shut down your merchant account unexpectedly due to compliance issues.

    Q: How can CBD merchants accept credit card payments safely and effectively?

    A: To accept credit card payments safely and effectively, CBD merchants must partner with a reliable payment processing company that explicitly allows CBD transactions.

    This means finding a payment gateway that can handle payments for your CBD products and ensures secure, compliant, and uninterrupted card payments processing. 

    Additionally, ensuring that your processing history is transparent and that your business operates within the legal framework is essential for maintaining good standing with your processor.

    Q: What features should CBD merchants look for in processing companies that allow CBD sales?

    A: CBD merchants should seek processing companies that specialize in high-risk industries and offer tailored merchant services for CBD.

    Key features include robust fraud protection, competitive processing rates, and seamless integration with online store platforms and in store solutions.

    It’s also important that these companies provide a stable payment gateway offering reliable uptime to accommodate consumer demand for CBD products.

    Flexibility in accepting various payment methods and comprehensive customer support are other critical factors to consider.

    Q: Can online CBD merchants easily get a CBD merchant account?

    A: While challenging, online CBD merchants can indeed get a CBD merchant account, but they need to find a payment processor that supports high risk merchant accounts and is willing to work with CBD businesses.

    It requires thorough research to find a suitable merchant account provider that offers the right balance of fees, contract terms, and account support tailored to the needs of an online CBD merchant. That’s why we are saving you the time of having to do all that research and choose Brother Processing Solutions

    This process may also involve preparing detailed business documentation and a solid processing history to demonstrate compliance and financial stability.

    Q: Why do processing companies consider CBD businesses high-risk?

    A: Processing companies consider CBD businesses high-risk due to the legal ambiguity surrounding hemp and cannabis products and the increased possibility of regulatory changes affecting the market.

    There is also a higher likelihood of chargebacks and fraud in the industry, partly due to the age-restricted nature of these products and varying consumer laws across jurisdictions.

    This risk profile necessitates specialized high-risk payment processing solutions for businesses selling CBD.

    Q: What steps should merchants take to successfully sell CBD products online and accept credit card payments?

    A: Merchants looking to sell CBD products online and accept credit card payments should first ensure their business complies with all legal requirements for selling CBD.

    Next, they need to find a payment solution for their business by partnering with a payment processor that has specific expertise in high-risk industries, including but not limited to CBD.

    Implementing robust security measures for their online store, such as SSL certificates and secure checkout processes, is also crucial for safeguarding consumer information and ensuring transaction security.

    Lastly, maintaining transparent and open communication with their payment processor can help address any issues that may arise due to the high-risk nature of their business.

    Q: What consequences might merchants face if they don’t use a dedicated CBD payment processor?

    A: Merchants not using a dedicated CBD payment processor face several potential consequences, including the sudden cancellation of their merchant account, freezing of funds, and inability to accept credit card payments, which can severely disrupt business operations.

    Additionally, operating without a proper CBD merchant account might expose them to compliance risks, legal issues, and reputational damage if their payment processes don’t adhere to industry and regulatory standards.

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