CBD products have been around for years however, hemp has become legal in the 2018 Farm Bill and has been instrumental in thrusting the market for CBD products. Notwithstanding, the payment processing industry has not been so welcoming and this has led to many challenges in the industry and CBD merchants.

A CBD merchant account is a merchant account that allows one to accept payments via credit card, and one that has become an approved provider for selling CBD products. Due to the high risk that is associated with selling and distributing CBD products, CBD merchant accounts often come with a higher price associated with it, together with more restrictive policies than the low-risk accounts.

Below is a list of the best merchant account providers in the industry that accept CBD merchants:

1. Payment Cloud: PaymentCloud has been providing high-risk merchant accounts for the past 11 years and now they accept CBD businesses too. They have a high success rate at getting merchants approved for an account. Unlike most high-risk providers, they do not charge a fee for setup or the application.The company uses a quote-based pricing system and they do not divulge any standardized processing rates or account fees. They also offer Authorize.Net as its payment gateway. In addition, it also offers a free virtual terminal that is available with every account. Currently, they are only approving accounts for CBD merchants that sell products that are used externally: oils and lotions. Products such as gummies, treats, and other edibles are currently prohibited. Some of the pros include no application fees, a free credit card terminal, and a dedicated account manager. Some of the cons include: may require an offshore account and there is no online knowledgebase.

2. Easy Pay Direct: EasyPayDirect is based in Austin Texas and has been providing high-risk merchant accounts for over two decades. They now accept CMD merchants but they do not take start-ups unless they have previous operating experience or they are well-funded. The company’s primary product is EPD Gateway. Clients may have to pay a premium for processing and account fees; however they will have a domestic bank or credit card processor. They are one of the few CBD providers to offer pricing disclosure on their website. Merchants from the U.S and Canada, who qualify, may even get approved within 7-14 days. The company’s processing rates start at 2.50% and in addition $0.25 for each transaction. These are however, volume based rates and only the largest businesses will qualify. The account fee is $29.99 monthly and you can expect a standard contract with an initial term of three years. It will then automatically renew annually. One of the pros of this gateway is that there is no early termination fee so it is much easier to close your account if the need arises. Another feature of EasyPay Direct is the load balancing feature which allows businesses to divide their incoming funds among many merchant accounts. This feature will be especially beneficial for high-risk business that may exceed the monthly processing limits that have been stipulated by the processor who has underwritten the accounts. However, separate fees must be paid for each account so this may not be cost-effective for some merchants. 

3. Square: Square has been offering CBD processing services for the past two years and has transaction processing rates that are higher than the company’s low-risk rates. However, you do not pay any account fees so it is a great alternative to getting a traditional high-risk merchant account. You no longer need to have an invitation to sign up and the company discloses their fees on their website. This allows the user to make an accurate estimation of what it will cost monthly to utilise their services. These prices are:

3.9% + $0.10 per transaction for in-person transaction with your card

4.2% + $0.30 per transaction for online and in-app transactions

4.8% + $0.15 per transaction for keyed-in and card-on-file transactions

These rates are very good for a high-risk business, especially in an industry like CBD. One of the cons thought is that Square charges the same rate for credit and debit cards so you will be paying a much higher rate for PIN debit transactions than you would be paying under an interchangeable-plus rate plan. This trade-off is reasonable if the volumes are low as you will avoid all the annual fees that come along with the traditional merchant account. 

Why Is CBD Payment Processing Considered High-Risk?

The processing industry has placed CBD products in the high-risk category which makes it much more difficult and pricey to acquire a merchant account. Businesses dealing with CBD products may find themselves labelled as high-risk for any number of reasons, the most commonly known reasons are:

• Unsubstantiated claims regarding the quality of the products
• High chargeback rates
• Legal issues about the product distribution

Presently, there are a few high-risk specialists that accept CBD businesses and in many cases they will require you to have an offshore merchant account. While some providers will only accept established businesses, others may choose to impose high monthly fees. Ensure that you discuss any restrictions that may be imposed, when you request a quote from a processor.