CBD is an increasingly popular product. It's not only legal, but can also be medically beneficial for many people with chronic pain or other medical conditions. But before you get started with selling, there are a few more steps you'll need to take first— among them is choosing the right payment processor.
Despite CBD being legal, payment processing options such as Stripe and PayPal are unavailable because CBD products are considered high-risk.
When starting your CBD business, it is crucial to find a suitable CBD payment processor since it can either accelerate the growth of your business or slow you down.
Have you been looking for a trusted CBD payment processor? Are you frustrated with the lack of options available to your business or don't know where to start?
If so, this blog post is for you. We will explore what to look for in a trusted CBD payment processor and why they are essential to running your business smoothly.
What is the importance of payment processing?
Being able to convert shoppers into revenue earned.
Needs to be sustainable, which requires a focused provider who can navigate the complexities of Hemp/CBD operation and compliance requirements across all 50 States.
Transparency is key, as captured through awareness of the bank attached to the processing solution that is required for access to the payment networks.
Choosing safe and secure payment processing is important because of:
High-risk businesses require safe and secure payment methods. You wouldn't want your business to make headlines about being hacked and sensitive customer information falling into the wrong hands.
When you find a suitable CBD payment processor, your business and your customers will be protected. However, you must know that secure payment processing means using PCI compliance, so you are not storing or processing your clients’ payment data in an unsafe way.
PCI Compliance is short for Payment Card Industry (PCI). It refers to the technical and operational standards that businesses follow to protect credit card data provided by cardholders and transmitted through card processing transactions.
In most cases, your payment processor can also help protect your business against fraud by identifying and flagging suspicious transactions and running regular checks to ensure that customer data is accurate.
Accepting card payments for your business
The world has become even more digital with the ongoing COVID pandemic, meaning that even old and big businesses now accept card and electronic payments. As a result, card payments and electronic payments have continued to grow while paper-based payments are declining.
Most customers are looking for a safe and contactless mode of payment for their orders and purchases because most of us don't carry cash around anymore. Young customers also favor card payments as they are most likely to use tap-to-pay and other contactless payment options.
eCommerce/online shopping and purchase for delivery is more of the norm in pure play CBD operations. Big box pharma and supermarkets carry CBD products which is embedded in their very complex checkout and payment routines.
Card payments are among the safest and trusted modes of payment for ecommerce transactions. They can also help your business grow as they will let you reach new markets with an online storefront.
What are the things you should look for in a trusted CBD payment processor?
Now, we've established the importance of having the right payment processor - especially in a high-risk industry as CBD. If you want to become part of the growing industry (especially since CBD sales are expected to reach $22 billion by 2022), here are a few things you should look for in a payment processor:
a. High-risk capability
It would be best to consider a CBD payment processor that can process high-risk transactions for a CBD business.
What does that mean for your CBD business? You might be more susceptible to fraud and chargebacks. Due to this, not all payment processors are willing to take the risk associated with CBD transactions.
Consider the states products can be shipped to as managed by eComm checkout pages, marketing claims that get one in trouble with the FDA, USDA and other agencies, and ensuring products do not contain more than 0.3% THC via 3rd party lab attestation.
So, you have to look for a payment processor that will not only be willing to take the associated risks, but will also help ensure that your business follows all the CBD regulations and rules - as we do here at Merrco.
b. Seamless integrations
Find a payment processor with a system that can merge with your current ecommerce platform, and by all means, try to avoid any that will need you to integrate into their existing systems.
Integrating a new CBD payment processor should not be a headache for you. So, stick to agile companies (from an integration point of view or otherwise) because they are most likely to move with your business as you grow.
Most good CBD payment processors will operate using API integrations, which is the ideal payment gateway. The advantage of the API integrations is that they can be monitored by you, the business owner, and provide you with an insight into how the ecommerce store looks from the customer's point of view.
c. Reasonable fees
Since you are the one shopping around for payment processors, it means that you can select the fees associated with the service. Make sure you understand all the costs included in the process to pick the best fit for your CBD business.
Some of these fees are:
- Discount and per item rates
- Monthly/annual fees
- Statement fees
- Compliance/non-compliance fees
- Chargeback fees
- Terminal fees
The trick is finding the right balance. Trusted and well-known processors charge a sizable upfront application fee, but others on the market may charge less without many compromises.
If your profit margins don't allow for these extra costs, then it may not be worth using particular services or products - even though they might seem like a fantastic deal on paper!
d. Customer support
No matter how secure and safe you feel your CBD business or site is, there are always risks - so best to take precautions ahead of time.
When choosing a processor, you need to know whether they offer personalized customer service or hire a customer service team to manage calls and emails from customers.
Imagine you're having any payment processing issues - chargebacks on your recently submitted order, for example - so you need to understand how the CBD payment processor you choose will handle them, be that disputes or fraud protection.
A great place to set up shop would be with partners that offer 24/7 email and phone support. This way, you're never alone if you have to put out any fires.
e. Reasonable contracts
Each company's contracts and fees differ, so choose a payment processor that will give you a contract that best suits your needs.
You should avoid companies that want to establish long-term partnerships, especially if they are not well-reviewed or show customers to back up their excellent service claims.
Be sure to do your research before signing a contract with any company. In addition, some may require an early termination fee if you want to switch payment processors in the future, so keep that factor in mind as well.
The Bottom Line
If you want your business to transform and grow, choose a proper payment processor — one that will enable you to manage your business, whether online or offline.
When running a successful business, a lot can happen! But if you have an easy gateway to efficiently manage your business with a reputable and safe CBD payment processor, life might get just a little easier.
If you're a US CBD merchant or a Canadian licensed cannabis producer or dispensary looking for payment processing solutions, Merrco has what it takes. We keep customers compliant in regulated industries, while giving you an edge over your competition with intelligent, simple payments that are tailor-made just for you!
Want to explore more? Our payments experts have experience working with a wide range of businesses in different sectors. Contact us today and we can help you find the right solutions for your business. Call us at 1-800-957-0534 or email us at firstname.lastname@example.org.