Payment Processing Guide for CBD Businesses

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The sale of Cannabidiol, commonly known as CBD, was made legal by the Agriculture Improvement Act of 2018, as long as it contained no more than 0.3% THC. In less that 2 years CBD has become a multi-billion dollar industry and industry revenues are projected to grow to over $25 Billion. 

As CBD is a new industry, there is a large number of regulations involving payment processing and banking. As far as the sale of CBD products online these are the regulations:

  • Certificates of Analysis for ALL products must be posted on the website
  • All products must contain no more than .3% THC 
  • Photos of ALL products being sold must be posted on the website   
  • Pricing for ALL products must be posted on the website   
  • Privacy Policy must be posted on the website   
  • Refund/Return Policy must be posted on the website   
  • Shipping Policy must be posted on the website   
  • Terms & Conditions must be posted on website Visa & MasterCard logos must be on the footer of the website 

In addition there are a number of medical claims that can’t be made about CBD curing the following:

  • Anxiety (anxiety disorder)  
  • Inflammation  
  • Nausea (vomiting)  
  • Pain (painkiller, chronic pain, pain relief, alleviate pain, aches, muscle injury, muscle soreness)  
  • And many more ailments/diseases

Why is CBD Hard to Place/High Risk? 

The implied benefits of CBD have not been validated by the FDA, therefore many banks and processors are reluctant to support the sale of these products. Banks and processors typically do not like to process for businesses that sell a product on unclear legal grounds. Although CBD is legal on the federal level, CBD laws vary widely from state to state, creating a number of legal challenges for merchants who sell them.  

Why are processing fees so high for CBD merchants? 

Given that the use, benefit, and legality of CBD is still unclear, many banks and processors require extra safeguards in place to insure they are protected. Extra costs to put proper compliance and monitoring in place, leads to high rates, extra fees and reserve.  

Why shouldn’t I just use Square? 

Square aggregates your payment account with those of other merchants, rather than providing you with a true full-service merchant account. Because of this limitation, the risk that your account will suddenly suffer a freeze, hold, or termination is higher than it is with a traditional merchant account. In addition to reliability, Square users often complain about their customer service.

If you’re interested in working with Premier Payments Online, please contact us or schedule a call.

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