The CBS industry is growing day by day. But unfortunately, CBD and its products are still considered to be illegal. It is the stigma that is attached to CBD and its products which makes it difficult for the merchants to accept payments as well as for the banks to accept CBD merchants as their clients. CBD products are still considered to be illegal in many countries.
Despite their numerous health properties, CBD merchants encounter challenges every day. CBD oil and other products are safe to use because the active ingredient THC is not present among the CBD oils and other products. CBD oil is meant for only medicinal purposes. People using CBD products do not feel intoxicated. Despite all that, they still are considered to be risky.
One of the biggest challenges faced by CBD sellers is unsubstantiated health claims. Your products have to be approved by the FDA to be available to the general public. If not, then your product will be categorized as a pseudo-pharmaceutical drug. This means that the drug is not a prescribed drug.
Some of the major challenges faced by CBD merchants:
- Conflicting laws :There are many conflicting laws which is associated with CBD merchants. Because of these conflicting laws, it is the seller who ultimately suffers. Many countries still consider CBD products as a Schedule 1 drug. This is what discourages the bank to accept CBD merchants as their clients. No banks feel safe to get associated with a merchant who yields so much of risk.
- The public image of CBD and its products :Many people still believe CBD and marijuana to be the same. Despite the fact that they are not. This is why CBD industry has such a bad reputation in the market. People are under the perception that since hemp and marijuana come from the same plant that is cannabis, both of them are same and hence illegal to use
- Challenges faced by the credit card vendors: Another bigger challenge that CBD merchants often have to deal with is the reluctance of credit card vendors. Credit card companies usually don’t allow CBD merchants to process or accept payment for CBD products. Mainly because it is risky and also people often claim for chargebacks. This is why most of the CBD merchants still use cash as their only way of accepting payments from buyers. This way they have no way to scale up and reach to the larger market, that is the online audience.
Why are banks so reluctant to accept CBD business accounts?
Even after Obama’s administration issuing guidelines to all the banks to assist CBD merchants, banks are still nowhere near to accepting CBD merchants as their business clients.
The biggest reason being conflicting laws associated with CBD merchants, this demotivates banks to get linked to CBD merchants. Plus, no bank feels the need to go an extra mile to make it legal everywhere.
What about credit card processing for CBD merchant account on online platforms like Shopify?
Even online payments methods like stripe, credit cards, and PayPal refuse to get associated with CBD products payment transactions. All because of the term CBD. Even if they do agree, there are reports where they turned down the proposal and left them hanging in the middle of the way. CBD products which fail to get approval from FDA are more likely to face rejection.
Accepting cash can be a way to receive payments, but for how long? This way you get stuck with a particular area only. This way your CBD Company will never grow. Also, there is always a risk for the cash to get stolen.
What is the reason for banks to consider CBD as a risky business?
No matter how much CBD merchants try to explain and hand over reports of CBD being completely natural and non-toxic, banks are still sceptical about it. We can understand by now why! Readers may note that CBD and marijuana are two completely different products. Marijuana is used by people to have a rather transcend feeling. A feeling with damages our brain, while on the other hand CBD is reliable and safe to use and is used only for medicinal purposes.
Even people are gradually realizing its array of health benefits. But then, different country and state have different rules and regulations for CBD products and this is why banks find CBD business to be extremely risky. Also, it is the very product that the merchant sells and its link to cannabis family makes it harder for banks to accept merchant accounts.
How can iPayTotal help you?
Now we know how difficult it can be for CBD merchant accounts to get approval from their local banks or even from their credit card vendors. But, what can be done to overcome such challenges? Is there no way at all for the CBD merchants to accept online payments?
Well, there is a solution and a good one and the answer is iPayTotal. iPayTotal is a reliable merchant service provider who works ethically and will help you getting your CBD merchant account to be able to receive online payments smoothly.
Here’s what you need to have to get started:
- A valid business licence of your CBD Company.
- We will need the vendor’s agreement or the supplier’s agreement.
- The business plan of your CBD company
- National ID proof of all the owners
- Address proves of all the companies owners will be required too
- Utility bills of the owners
- One cancel check
- A non-expiring ID and password of your company’s website.
Remember, domestic banks and credit cards vendor wary when it comes to accepting CBD merchants. Also, there will be a few challenges too. Hence, to overcome all of the above-mentioned challenges, you must talk to an online merchant account service provider who will make the process easy for you.
Keep all the documents ready because documents are important for us too and normally it takes 5 days to 2 weeks of time for an account to get approved.
Ensure that your company is following FDA and Government guidelines. Keep your chargebacks low which is lesser than 2%. Get in touch with us, we have helped many CBD merchants like you to create their online merchant account. Do follow the guidelines properly and run a legitimate CBD business.