Running a business these days requires the capability to accept and process card payments, whether they be debit cards or credit cards. This is especially true for people who run an online business as this is one of the main payment options available on this medium. 

With CBD becoming a more popular product, many retail stores are taking to the internet to sell CBD products. This can create a little bit of a problem for companies, as a CBD store online is often classified as high-risk, making it difficult to find a processing merchant. 

But, all hope is not lost. There are options out there available to high-risk merchants of all kinds.

What Does It Mean to Be a High-risk Merchant?

A company can be considered a high-risk merchant based on a number of different factors, including:

• The type of products they sell.
• The credit history of the company and the owner. 
• Their banking history. 
• The average amount of the payments they must process. 
• A bankruptcy on file.

Being high-risk can make it challenging to find a payment processor, leading to increased fees and sometimes additional requirements to start your merchant account. 

Why Is CBD Considered High-risk?

Online CBD sales become high-risk for two key reasons. 

• First, the CBD industry is fairly new. This newness makes merchants in the industry prone to payment card fraud and charge-backs, making processing payments for these businesses a risk some banks do not want to take.
• Second, CBD is not legal everywhere yet. This can cause CBD retailers to hover in a bit of a gray area, and not all banks will be willing to work within this space quite yet.

What Industries Are in the High-risk Category?

A CBD boutique that sells items, such as CBD edibles and pure CBD products, is not the only industry that will receive a high-risk tag. Other industries that are placed into this category include:

• Firearm sales.
• Adults products, including porn sites.
• Online dating services.
• Online gambling platforms.
• Travel services.

How to Get a Merchant Account for Your Online CBD Store

Even though CBD is considered high-risk, there are still ways to get a merchant account for your CBD store. It just may come with a little more work and a little sacrifice. 

Start the process by looking for high-risk processing companies. These companies are capable of working with high-risk merchants that may have trouble getting traditional banks to work with them. 

Once you have a list, look at the fees and requirements each company has in place. High-risk merchants should anticipate having to pay larger fees than other companies due to their increased nature. But, look to see if they require other fees, such as start-up fees, as well. 

Some high-risk merchant processing companies will require companies to put money into a fund. This fund is then used as a bit of a cushion for the processing company. 

Gather all the information you have on your company and the information they require with your application. Make it clear the type of business you have, and be ready to provide any additional documentation the company requests. 

Then it really is just a waiting game while they review everything and decide whether or not to accept your business. 

Conclusion

The CBD industry is high-risk among merchant processing providers because of several factors. This can make it difficult for CBD companies to get a bank account with CBD online banking registration that will allow them to accept card payments through a traditional bank. 

But the capability for any online business, including online CBD sellers, to accept and process card payments is essential. Without this capability, businesses cannot sell their products or grow their business as a whole.

There is hope for high-risk merchants in the form of high-risk merchant processors. These companies specialize in working with companies that are in high-risk industries or have been deemed high-risk due to other factors. 

These processing companies may require higher fees for their services, longer contracts, start-up fees, and more to allow you to use their services. Be sure to review the requirements each company has in place before choosing which one you want to use. 

Sources:

https://www.bigcommerce.com/blog/cbd-payments/#8-of-the-best-cbd-payment-processors