Cannabis products, in general, are not legal worldwide. Although many states have recently legalized using of cannabis products for medical purposes, there are still countries and states within the United States that considers marijuana and all cannabis products including CBD as illegal, making it hard for merchants to get a CBD Merchant Account because CBD industry is considered high risk. It is also difficult to obtain approval for payment gateway with most of the credit card processors. That is why finding the right CBD merchant account provider that can give the right CBD OIL Merchant Services is of utmost importance.
What is CBD and why is it considered as high-risk?
CBD or Cannabidiol is an extracted compound of cannabis products such as marijuana and hemp plants. Its legality is often questioned because of its association with cannabis. But at its purest state, CBD is not psychoactive and has been proven to have medicinal benefits and was shown to have effectively treated several ailments like pain and inflammation to epilepsy. It is said that CBD that is derived from marijuana plants are proven to be more effective in providing medicinal benefits but CBD from marijuana plants are likely to contain THC compound which is a psychoactive ingredient. The presence of THC makes cannabis products illegal in some areas and is the reason why CBD Merchants are considered as high risk. Many banks are not willing to open accounts for CBD Merchants or even if they find bank that is willing to approve the CBD Merchant Account application, it comes with high processing rates which can go high as 6% or is prone to account closure without warning that will make it hard for the merchant to operate the business effectively and efficiently.
Features to look for CBD Merchant Account Provider that will provide CBD oil merchant processing
Having the right CBD Merchant Account Provider that can provide CBD Merchants with premium CBD OIL Merchant Services is vital to be able to run the business. The CBD Merchant Account Provider can help CBD merchants in protecting their businesses from the closure of accounts, frauds, and chargebacks by providing the following features such as a secure payment gateway, chargeback alerts, fraud prevention, and protection.
1. Multi-bank Processing
Multiple banking solutions are also needed for CBD merchant accounts as well as a competitive processing rate that is below 6%. A minimum of four banking solutions must be provided by the CBD Merchant Account Provider whereas credit and debit card payments are disbursed across all bank accounts. The benefit of doing such provides the CBD Merchants with limited bank exposure, reduced chargeback ratio, and avoidance of losing processing capabilities because even if a bank closes one account, there are still backup accounts that CBD merchants can rely on.
2. Premium Fraud Prevention
Just like any high-risk merchants, CBD merchants are often targeted by fraudsters and are at risk for consumer fraud. Because of the fear of the association with cannabis and hemp products, customers are prone to initiate fraudulent chargebacks or use stolen cards in purchasing. The CBD Merchant Account Provider must be able to provide a secure payment gateway that allows detection of fraud in real time. The payment gateway must be programmed to be able to automatically decline or suspend a suspicious transaction that requires further investigation.
3. Protection from chargeback
The right CBD oil merchant processing provider can also help CBD merchants to prevent incurring high chargeback ratios by fending off unnecessary chargebacks. Providing real-time and round-the-clock chargeback alerts help CBD merchants to view and analyze chargebacks as soon as they are initiated by the customers. The merchant can instantly file for a dispute should the chargeback appear to be fraudulent or unwarranted.
Other ways to fight off fraudulent chargebacks are as follows.
- Training store employees to require ID with photo identification for all credit card transactions for them to be able to double check the identity of the customer (i.e. same name on both cards and comparison of signature).
- Retaining of all credit card and debit card receipts by storing them properly to which they can easily retrieve documents should a proof of transaction is needed in case a chargeback is initiated.
- Utilization of time-stamped video surveillance in the cash register area that can capture the customers’’ faces. This will come in handy as a cross-reference for the date and time indicated in the disputed credit card transaction as well as an evidence to dispute chargebacks.
- Not processing of transactions that are suspected to be fraudulent without double checking and confirming with both the customer and the card issuer.
How to keep the CBD Merchant Accounts in Good Standing?
Once the CBD Merchant is able to get a CBD Merchant Account, it is imperative for them to maintain their accounts with banks and credit card processors in good standing. Maintaining good bank and credit history can help increase the possibility of the bank seeing CBD Merchants as a legitimate and viable business that they can work within the near future. The merchants can follow the standards below to maintain their accounts in good standing.
1. Maintain a good history with debit and credit card processors.
2. Perform a high sales volume consistently.
3. Maintain a high balance in business bank accounts.
4. Dispute chargebacks as necessary and also provide strong evidence for the said disputes such as the copy of the card receipts and a copy of a time-stamped CCTV recording.
5. Be transparent in all communication with the bank and payment processor.
The said standards are things that any business should strive for, especially for a new, high-risk industry such as CBD. CBD merchants who are pioneering the said industry must pave the way on how they handle their financials as they will be the one to set the standards on how the bank will choose to work with the merchants within the CBD industry for the years to come.
How apply for a High-risk CBD Merchant Account?
Application for a CBD Merchant Account is almost the same with other high-risk industries. It is done by submitting to the CBD Merchant Account Provider the following requirements.
- Duly filled-up application form with affixed signature of the merchant
- Supporting documents as required by the CBD Merchant Account Provider
The submitted information will be reviewed by the underwriters. The accuracy of all the information submitted will also be verified. Once approved, the CBD OIL Merchant Services can be up and running within 48 hours after the approval of the said account.
Making the right choice for CBD Merchant Account Provider
Even though your CBD merchant business is considered as a high risk one, we at Ipaytotal provide you with the necessary services. Our vast experience of the industry makes it possible for us to set up your merchant account in a timely and secure manner.
We provide you with the best support that assists you to grow your business. This makes it easier to get better rates, faster funding, and certainly, the removal of issuer declines.