CBD Merchant Account

A popular product that has gained increasing acceptance over the last few years within the medical field and by recreational users alike has been Cannabidiol, otherwise known as CBD.  Used in the medical industry as a treatment for many of the same symptoms and illnesses that medical marijuana is prescribed for, it has also been used for recreational purposes in states where marijuana has been legalized, leading to the increasing demand by patients and users for this cannabis byproduct.

CBD is still classified as a Schedule 1 drug, creating more questions than answers concerning the legality of its production, distribution and possession of the chemical for both medical and recreational purposes.  As a cannabis derivative, CBD it is still considered to be illegal under federal law in the USA even though a majority of states have slowly adopted the legalization of marijuana and CBD as a medical remedy for patients suffering from many neurological and mental illnesses.

One of the reasons that the chemical has gained so much interest from the medical field is because it possesses many of the same benefits that marijuana offers without Δ9-tetrahydrocannabinol, also known as THC, the chemical behind the acute psychotic reactions and physical impairments that are all so commonly associated with marijuana. For this reason, the demand and legalization in many states of CBD has increased, allowing for patients suffering from obesity and anorexia to Parkinson’s and Alzheimer’s to find comfort with a natural remedy.

While the usage and demand continued to increase, businesses looking to cash in on this growth industry have run into numerous problems when trying to acquire financial services, including finding reliable CBD merchant account services for both online and retail storefronts.

Why is CBD credit card processing so limited?

CBD merchants services can be as difficult as medical marijuana merchant accounts and hemp merchant accounts to be approved due to their high-risk perception in the financial industry. CBD merchants have found that banks are not as willing as state legislators to accept the ever-changing social opinions about the product, this has made finding a financial institution to partner with that is willing to work with CBD merchants in the cannabidiol industry a daunting process and many times the very roadblock that prevents merchants from acquiring a CBD merchant account.

Most banks and financial institutions that are part of the Visa and Mastercard network have a banking charter that allows them to operate between states, meaning that the federal government controls many of their banking regulations while monitoring much of their practices. Even though marijuana might be legalized in the states that the merchant is operating in, the federal laws regarding marijuana and CBD take precedence, forcing many interstate banks to abide by these federal regulations to prevent any fines or the possibility of their charter from being revoked.

In recent years, a few local credit unions have received state approvals and taken the chance by venturing into the cannabis banking industry by offering bank accounts along with ATM services to marijuana dispensaries and other cannabis businesses. Unlike chartered banks, credit unions operate under different financial laws and that has allowed some them to provide much needed checking account services and limited payment services to these businesses.  While these solutions have not been time-tested as to the validity of their services, only time will tell if the credit unions can continue offering their products and services to the marijuana industry.

Who provides CBD merchant accounts?

With the limited number of payment processors and financial institutions that are offering CBD credit card processing services, the search to find reliable payment processing services can be time-consuming and possibly might never render a payment solution. Finding a merchant services company that understands the marijuana industry and has experience with CBD merchant account services can save businesses time and money through wasted merchant account applications and countless phone calls.

Many merchant services companies operate as independent sales organizations with their primary focus on establishing and building relationships with a single payment processor while most high-risk sales organizations seek out multiple payment processors specializing in different niche industries that their prospective merchants operate in.  Merchants that work with an independent sales organization usually have more merchant services options as well as an expedited application process because the sales agents have a clear understanding of the merchant needs and a solution for them.

Most merchant services companies and payment processors are unable to handle any form of cannabis products, including hemp or CBD merchant accounts, making it important for merchants to ask the correct questions and verify the payment processor can handle higher risk industries before applying.  Many merchants in the CBD industry have found success with merchant services by working through a high-risk sales organization that specializes in the tobacco and medical marijuana industries, providing reasonable solutions in this precarious time.

How to get CBD merchant account services

CBD credit card processing service providers are normally companies that can handle medium to higher risk businesses, meaning your local bank’s merchant services provider will probably not be able to handle these industries.  Though there are thousands of merchant services organizations throughout the USA and very few specialize in the higher risk industries or are able to find financial services that can accept CBD merchant accounts.

A simple web search can yield a number of options for credit card processing, whether its a cannabis merchant services company or a tobacco merchant account provider, working with a payment processor familiar with to the CBD industry can help merchants find affordable solutions in a quick and affordable manner.  Many of the merchant services providers that can offer payment services to the cannabis industry are smaller, more niche financial companies, making the search for them more difficult and the importance of partnering with an experienced sales organization all the more.

The payment processing professionals at Tobacco Merchant Services are able to help CBD merchants set up with industry-specific merchant accounts, ensuring that businesses have consistent and reliable merchant account solutions. For more information about our CBD credit card processing services, or to apply for a CBD merchant account, please contact one of our payment professionals to get started.

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