The extraction and sale of CBD was legalized in 2018, but for some reason, players in the CBD industry still face discrimination, especially from financial institutions.
If you start a CBD business, one of the challenges you’re going to have is finding a mainstream payment processor that will treat you fairly.
Most of the big-name, payment processing companies have a negative attitude toward CBD businesses, but advocates are campaigning to turn this around.
In the meantime, as a CBD merchant, you have to look for a payment processor that will support business transactions, and allow customers to have an outstanding experience.
Why PayPal Won’t Touch You
PayPal is one of the titan payment processors, and when you start an online business, you can use PayPal to accept payments from your customers.
But, PayPal typically declines CBD-related transactions, and when we reached out to them for an explanation, they gave us the standard robotic reply.
O, CBD merchants are high-risk, and PayPal has a policy against hazardous products including narcotics, drug paraphernalia, guns, and various prohibited substances.
Seriously, the main reason why cannabis had been prohibited was down to government propaganda, which likened cannabis to Class A drugs.
But, scientific studies have vindicated cannabis, as researchers have found that both CBD and marijuana possess extensive therapeutic benefits.
Factors to Consider When Choosing a CBD Payment Processor
Now that the bigwigs won’t touch you, you’ll need to look for a payment processor that caters to CBD and other similar businesses. There are numerous payment processors out there, but they aren’t on the same level, which is why you must choose carefully. The following are some of the things to consider in a CBD payment processor.
1. Easy Integrations
Poor integrations can cause you to look for a new platform, which is a needless money drain. Thus, it’s critical to ensure that the payment processor can be integrated with ease so that your business won’t be inconvenienced. Some CBD merchant processing systems might urge you to join their existing platforms, and although this would make for seamless operations, it might lead to loss of autonomy, which isn’t okay. Quality payment processors offer APIs that make for easy integrations and allow for easy detachment in the future.
2. Reasonable Charges
When evaluating the suitability of a product or service, price shouldn’t be left out. Expensive payment processors may not necessarily be the best, and low-cost payment processors may not necessarily be the worst. But, you should study the range of features, and decide whether they match the cost. Apart from the upfront fees, you might have to make other payments including statement fees, compliance fees, terminal fees, and monthly/annual recurring fees. Generally, established CBD payment processors are on the costlier side, but make sure to choose a company that fulfills your business needs and is within your budget.
3. High-Risk Availability
As a relatively new industry, the CBD market may be targeted by fraudsters who might issue fake cards and try to swindle. CBD may be legal, but the existing conditions, make it a bit legally ambiguous, thus making it a target for bad players. And so, you need to partner with a payment processor that supports high-risk industries. Some of the common high-risk industries include adult services, bitcoin trading, and online dating.
4. Sound Contracts
One of the mistakes you can make as a business owner is rushing to sign up for a payment processor without comprehending the contract. Some companies can draft binding terms that would leave you vulnerable to legal action in the future. And so, make sure to carefully go through the contract, so that you’re in a position to make sound business decisions.
5. Customer Support
With online transactions, you can’t rule out disputes. One of the things that can leave a bad taste in a customer’s mouth is poor conflict resolution. And so, you need a payment processor with quality customer support to ensure that disputes are resolved quickly and that your business isn’t interrupted. Customer support may be helpful even when you need explanations and clarifications.
Whether the CBD payment processing company is young or old, it must have created a certain impression among its customers. You may type out the company name on search engines to check reviews and online posts, which would help you assess whether the company generally has a good or bad reputation.