CBD payment gateway news: a high-risk spotlight – updated 10-04-2019 –
Tasker Payment Gateways LLC helps website owners with payment gateway solutions and merchant account recommendations. In an effort to make the best CBD payment gateway recommendations possible, we strive to stay educated on the industry and pass on what we learn to our readers.
Below is an ongoing news and info stream, updated regularly, that reflects our impression of the CBD payment gateway and credit card processing industry. As always, do your own due diligence on all services before you sign up and please seek qualified legal guidance before launching a CBD business.
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10/04/2019 “What does ‘multi-pay CBD option’ mean?” and “how do I sign up for Square’s CBD beta program?” dominate the questions we’ve received lately
The first week of October has ….so far… been one of the best we’ve seen for CBD site owners since Elavon was in the CBD business last spring. We are seeing a lot of businesses find suitable CBD processing and start to move the inventory they have built up since the Elavon CBD fiasco. We hope this trend continues. Here are the highlights and some “how to’s”:
What is multi-pay checkout processing for CBD?
Multi-pay, also known by many other names, like split-pay, flex-pay, or easy-pay, is a really interesting solution that’s come about lately. This solution is VERY CBD friendly as it allows virtually any legal form of CBD out there. Additionally, it integrates seamlessly with WooCommerce and Shopify, and – via ECWID, works with limited functionality for Wix and Squarespace sites too.
Multi-pay credit card processing solutions can also work alongside traditional processing too, meaning both options could appear at your checkout.
Multi-pay has been working well for CBD folks. It integrates with standard carts and, with full integration, auto-populates a simple multi-pay option (often a 4 pay) showing what the payments would be – alongside the products before they are added to the cart.
It creates a familiar, straightforward, interest-free, multi-pay like many folks are used to seeing online or on TV shopping channels.
Online shoppers see a “4 easy payments of …” amount and are instantly approved for easy pay purchases. Because multi-pay works well with Shopify and WooCommerce, it’s been very popular. Contact us anytime for details or for a recommendation on a CBD friendly multi-pay solution.
Here’s some feedback we have heard from folks who use a multi-pay CBD solution as their only processor:
- Set up is straightforward as the provider does the integration for free.
- Costs are low, especially fixed monthly fees.
- Without a detailed explanation of the payout process clearly listed on your site, there can be some checkout confusion when multi-pay is your only processing option. Our partners have sample verbiage that converts well. Feel free to contact us for recommendations
- Site owners are happy with the payouts as the business is paid their money in full, net fees, even when customers pay by credit card over time.
- Business owners find their average sale amount generally goes up when customers can split their payments.
In addition to being a stand-alone solution, it also can exist alongside other processing solutions, such as the Square CBD Beta program discussed below.
Square’s CBD beta program
So far, we’ve heard decent feedback from a handful of folks using the Square beta CBD program. It can be tricky to get in to and has some restrictions but for those using it, it works. Here are some highlights:
- The “easy” integration options feel pretty limited. WordPress folks and, interestingly enough, “Limelight CRM” users appear to have the easiest path to integration as those solutions have the Square API as a “native solution”, meaning it is built into their platforms and does not require additional layers of software.
- Allowed CBD product types are a little limited. Items like vape, e-liquid, flower, etc are completely off-limits.
- Support is “virtual”. We have heard that getting live human support is a challenge, but often Square’s program is “referred” by a payments pro who generally can provide a layer of support without adding any significant cost – or any at all – depending on the situation.
- Shopify integration is possible, but we recommend working with a company familiar with the integration process as the Shopify/Square connection for CBD is not intuitive and requires workarounds that can be costly. Contact us for a referral.
How do CBD websites sign up for Square’s CBD beta program?
There are likely many ways but as Square’s CBD program still feels like an “invite-only” solution, we feel the best way is to have someone facilitate the invite.
We have trusted independent agents that are able to refer folks to the Square CBD beta program and assist with any integration questions that come up along the way, often at no cost.
If you would like an invite to the Square CBD payment gateway solution, feel free to drop us line here, and we’ll get you in touch with someone that can help right away.
We get a lot of requests for introductions and recommendations on hundreds of different topics, so if you do contact us about how to sign up for the Square CBD beta program, please mention that in your inquiry and provide your URL.
08/13/2019 Topical CBD, high volume US CBD sites, and Canadian CBD businesses are all hot topics
As the ever-changing world of CBD merchant accounts continues to….. well… ever change… we are hearing some consistent themes and for the most part, the trends feel like they are going in the right direction.
The good news we are hearing so far this month:
Topical CBD vs ingestible CBD and tinctures- It has long frustrated site owners that sell CBD creams and skincare products that they were classified at the same risk level as CBD merchants selling products designed to be ingested. This seems to be changing- to the point where some CBD oil merchants are marketing their product not as an ingestible, but rather as a topic oil. We recommend ALL CBD site owners consult an attorney and ensure that their products and their marketing are well within the current regulatory structure, but for site owners that do sell true, topical only, CBD, the payment gateway market feels stable. This is good news.
Canadian CBD merchants selling to Canadians in Canadian dollars- This type of account has really matured, it feels. Canadian site owners that need a payment gateway to accept CAD from Canadian clients are now, for the most part, able to accept credit cards in a fairly straightforward way.
Large US CBD sites selling to US clients- Much to the frustration of smaller CBD business owners, the options available to stores and websites selling more than $50k per month is still more diverse and generally less expensive. The processors are – believe it or not- still digging out from the rubble of the Elavon shut-downs and many of them still strongly prefer established business with credit card processing history showing $50,000 per month in processing. Over the past few months, there have been many processors that “opened up CBD processing” to larger merchants- often to abruptly stop accepting applications almost immediately – sometimes with little or no communication to the site owners or merchant account agents caught up in the policy change. We hope this recent trend of stable solutions for larger merchants remains stable. As for new sites, there are still options for start-ups, just not as many.
Zen cart, cube cart, and CBD payment gateways seem to be playing well together – In addition to WooCommerce, which has been leading the way in terms of flexibility, both Zen Cart and Cube Cart have some CBD friendly integrations we have been hearing some good things about. Shopify does as well, but that integration, like many others, is imperfect for CBD, but functional.
- Card association audit talk and a lack of all card types for many processors- One item that seems to still be a real issue for some processors is the ability to accept all 4 major card types for extended periods of time. It is often described to merchants as an “audit” by a card brand and disruptions are usually temporary – but, they also often come with additional restrictions. Regardless of the reasons, it is an issue still and many e-commerce merchants are patiently awaiting the green light from their processor that they can accept all major US credit card brands again. This tends to affect “start-up friendly” processors more than those few processors working with larger, more established CBD businesses.
Need CBD payment gateway and merchant account advice?
If you are a CBD site owner that would like to speak with a vetted, independent CBD payment gateway specialist, please contact us here for a recommendation.
07/17/2019 Retail, wholesale, and major cart credit card acceptance feels more stable
After the big Elavon shut down in March of this year the CBD market, in terms of payment gateways and credit card processing, was in real turmoil. The news changed daily, and providers struggled to not only keep up with the flow of applications but also to interpret the requirements of their processors and sponsoring banks.
Many well-meaning brokers, agents, and processors inadvertently gave out payment gateway and credit card processing information that ended up no longer being accurate by the time it was delivered.
The situation appears to be improving – slowly. Although the CBD payment gateway market is still developing – and not nearly as established, affordable, or predictable as other payment gateway verticles – like smoking accessories, vape, or cigars, for example, there has been a small but noticeable slowdown in the rapidness of changes in the CBD payments arena.
Based on our many ongoing conversations with CBD site owners, merchant account brokers, and site developers- a few areas, in particular, seem to have become somewhat more reliable and consistent.
Here are some highlights of what we are hearing this week:
- Retail – brick and mortar businesses that accept chip or swipe transactions are having an easier time finding traditional terminals and the back end processing that goes with it.
- Wholesale CBD websites – e-commerce CBD sites that sell to retailers and other e-commerce merchants are able to find solutions that allow for emailed invoicing, credit card payments and ACH’ed invoice payments
- Major card and site builder consumer CBD websites (“normal” CBD sites) – business owners that sell CBD oils, soaps, lotions, and other common CBD products online are still greatly affected by the site builder they use. Accepting credit cards for CBD is far more straightforward when using a site builder like WordPress/WooCommerce, OpenCart, Shopify, or Magento than many other solutions. Website owners using highly limiting integrations such as GoDaddy GoCentral are still having a very hard time with processing.
- Larger marketers using name brand CRMs – integrations are seemingly opening-up for folks using enterprise-level, or highly scalable marketing software. CRM systems used by many larger marketers tend to be fairly well supported by those processors willing to work with CBD. Customer relationship management systems like LimeLight, Konnektive, and Response CRM generally have better options than those using smaller, or custom CRMs.
If you would like an introduction to an independent agent that can give you the latest updates on what CBD merchant account options are available, please reach fill out our short contact form and we will get back to you right away.
06/18/2019 A pause in “big” approvals – WooCommerce, and B2B still viable as are mid-sized established CBD sites
As we discussed last week, the talk of the industry lately has been the major player who was boarding “domestic” or USA based credit card processing for large, established CBD merchants at great rates.
According to multiple sources, that processor has sent out notices saying that although the first few businesses that applied for a CBD merchant account are approved and things are looking great, any applications not yet approved (likely hundreds of them??) are in a holding pattern until the processor has time to review the existing book of CBD business on their systems. This could take days, weeks, or be indefinite.
As of June 18th, here is the state of the CBD processing world as we know it:
- CBD Businesses processing $75,000 or more a month no longer have a much easier path than smaller sites doing a fraction of that -at least as it stands right now.
- Businesses processing more than $15,000 per month, with solid financial backing and well thought out growth plans do have an option that does integrate with Shopify, Wix, WooCommerce, and BigCommerce, among others. This CBD solution has quite a few “hoops” involved and is pricey, but it works and has been around a while.
- CBD businesses using WooCommerce still have additional options available, even if they are start-ups.
- B2B, or wholesale CBD business also have additional options. These include secure, “card on file” options that allow wholesalers of CBD to have their business to business clients buy CBD inventory using a credit card that is securely stored for repeat business. This B2B option does allow start-ups and smaller growing companies.
- Canadian CBD website owners also have more options than US businesses with more favorable terms and easier integration with big site builders like WooCommerce, Shopify, WordPress, Wix, etc.
Contact us here to learn more or request a call with an independent agent who has their finger on the pulse of the industry.
06/12/2019 For the big dogs, communication resumes but slow approvals persist
The biggest buzz in the “Big CBD” processing world this week was the excitement around, and subsequent frustration following the “new” 75k per month and up, NMI/Authorize.Net compatible, solution. Based on our conversations with the independent agents doing the hard work during this time of “CBD’ageddon,” hundreds of applications have likely been submitted to this new solution and precious few have yet to be approved… If you are a “grass is greener” type, the good news is that some have been approved.
As we suspected the “straight to voicemail” underwriting situations and delays are being caused by the wave of high volume applications this provider is seeing. So, as it stands we are expecting the high-volume merchants who have already submitted applications to be approved, and are hoping that new merchants with a history of more than $75k per month will also be approved once the backlog dies down.
In terms of credit card processing and payment gateway integrations for small CBD companies and start-up websites, there are some solutions, but they are imperfect. As always, if you would like some information or an introduction to an independent agent with their finger on the CBD payments pulse, feel free to drop us a note any time here, and follow us on social media for updates. (Social media links at the top of this post).
06/10/2019 Backlogs, voicemails and delays
What we are hearing from our most trusted independent agents, the folks that do the heavy lifting and walk site owners through the complex frustrating steps involved in setting up CBD merchant accounts- is that they themselves are becoming frustrated.
Processing solutions, even those that focus on large, stable merchants have become so backlogged that they can no longer even give timely application updates to agents. The huge amount of closures that resulted from Elavon exiting the CBD market is showing no signs of smoothing out yet. We had thought by now there would be some stability in the market but there is not. The agents that we refer business to are relaying stories of delays and ever-increasing requirements.
We do believe that wholesale B2B solutions still exist and that WooCommerce integrations exist, but beyond that, the best advice for many may end up being to sit out the turmoil and wait. If waiting for changes in the market is not a good fit for you, please reach out. We are happy to recommend an independent agent with their finger on the pulse of the market (at least as much is possible).
Of course delays and declines are common, but for some folks, there is no choice other than to keep moving forward. We will keep our ears and eyes focused on new providers and new solutions. We will post any new solutions on social media, so please follow one of the links above.
05/30/2019 New US CBD solutions, and more props for WooCommerce
New US processor enters the CBD market – (again, if you are big enough)
We are still learning all of the details, but one thing is pretty clear. The future of CBD processing in the USA is looking brighter than the recent past. We are able to recommend this simple, domestic CBD processor to established US CBD companies who have a recent history showing their ability to process $75,000 or more per month.
On the negative side, this minimum volume requirement leaves out the majority of CBD websites, but we expect over time that requirement to come down. The logic behind the minimum volume is pretty solid, even if it is not what we all want to hear. The truth is, Elavon set up a huge amount of CBD merchants, many of whom are still scrambling to set up their processing. Any processor that wanted to open up CBD publicly to all merchants would be buried in applications. The minimums simply keep the initial workload manageable.
One of the best features of this new option is the ability to integrate it with a correctly set up NMI, or Authorize.Net account. This gives the larger CBD merchants that qualify tons of flexibility in terms of website builders. If you are processing more than $75k in CBD and need a processor based in the US that integrates with BigCommerce, Shopify, and – via Foxy.io – Squarespace and Wix, contact us for a recommendation. If you are small, or a startup, please read the section below.
WooCommerce leads the way in terms of CBD flexibility
When it comes to CBD start-ups and small CBD sites, one site builder stands out. WordPress, with WooCommerce. The “WP and Woo” combo offers almost unlimited integrations which allow us a broader range of possible solutions to recommend. Although larger merchants have more options, small merchants are best served setting up their sites using WordPress and WooCommerce.
05/23/2019 Square has been secretly processing for CBD- does that mean more options will open up?
Without fanfare, and likely to avoid a crush of thousands of recently shut-down Elavon merchants, Square has quietly been processing “some” CBD payments. For now, Square is only offering CBD processing to a very small handful of pre-selected, “invite only” merchants. (possibly less than you could count on 2 hands).
This does not present any type of “Square Processing” solution for the many online CBD sellers still looking for a way to take credit cards. But, does this mean even more options will open up for e-commerce customers soon? Now that other processors have learned of Square’s “beta” test will rates go down, and minimums drop as well? We think so. You can read more on the subject on the Forbes website, here.
04/22/2019 “Normal” CBD credit card processing does exist
US-based CBD startups do have processing options, but they tend to be more restricted in terms of card types allowed, and more expensive. In contrast, large, established CBD companies who process in the millions per year have more options. We have found that US processors, known as “domestic processors” in the processing world, have stable affordable payment gateway and credit card processing options. This is a new trend and we are working hard to keep up on the details.
Bigger CBD sites have a “leg up” in terms of taking credit cards
As of now, it does seem clear that large, US-based CBD processors have a real advantage in terms of taking cards. Big sites can set up a payment gateway that works with almost any site builder, including the popular ones like Shopify, WooCommerce, BigCommerce, & Foxy. Larger CBD business owners can also take cards without delays in funding or an excessive amount of false declines. Again, this is a rapidly changing environment, so please contact us here for the latest news or a processor recommendation.
04/09/2019 Elavon and CBD- here’s the latest-
UPDATE: Elavon has given existing CBD site owners an extension. CBD site owners using Elavon were told as early as March, 14th 2019 that they had only 45 days to stop processing CBD sales on Elavon’s system and find a new processor – this worked out to be April 28. Luckily, for site owners who did not immediately move forward with a new solution, there has been a reprieve, albeit a small one. Based on our conversations with site owners, agents, and sales organizations, Elavon has extended the shutdown date to May 16th. All CBD merchants will have to have a new processor in place by May 15th to avoid interruption.
Due to the recent shakeup in the US regarding CBD e-commerce merchant accounts and payment gateways thousands of hemp and CBD site owners are now finding themselves without a way to accept credit cards. Below we go over some of the top issues facing CBD site owners in terms of payments and discuss solutions as well.
CBD merchant accounts – still there, even after “The Big March Shutdown Notice”
At Tasker Payment Gateways, we’ve kept our ears to the ground for a while when it comes to the CBD and hemp oil industries. The processors and gateway providers are very busy. Some have already stopped accepting new website owners as clients; others have but minimum processing requirements in place. We are happy to report that we are still having fantastic success when recommending appropriate, affordable, payment gateways to CBD site owners – even for startups.
CBD e-commerce sites need specially set up payment gateways with credit card processing that’s underwritten for CBD, and the payment gateway needs to work with a site owner’s shopping cart of choice.
You may have been turned down by your shopping cart’s out of the box payment processor, for example, Shopify Payments, for being high-risk – but why is CBD high-risk? CBD and hemp oil accounts are considered high-risk due mainly to regulatory concerns and fear of chargebacks on the part of the merchant account providers.
Because processing can be hard to come by, many site owners try, at first, to use a low-risk payment gateway like PayPal for CBD sales. Taking this shortcut is not a good idea – if the payment gateway is not correct for the CBD industry, website owners often suffer from held funds and shut down payment gateways – not a great way to build a CBD business. Luckily, we have the experience to help guide website owners in the right direction.
Plenty of CBD merchants contact us these days for CBD payment gateway and payment processing recommendations. To help with that, we thought we’d create a short overview of things to keep in mind when you’re about to set up an online CBD shop.
Are you ready to start your online CBD business but need high-risk payment gateway recommendations for credit card processing? Contact us today by using the short form at the end of this article.
CBD payment gateways in Canada unaffected by the industry turmoil
One item we want to make clear: Canada was by and large not impacted by the large CBD account terminations that affected US-based CBD website owners this year. We are finding it very easy to assist Canadian website owners with payment gateways and merchant account recommendations. Unlike US CBD merchants, the Canadian site owners we work with that ship to Canada are still able to use the same processors this year as they were last year.
Canada to US CBD more complex
One important note: Canadian website owners who intend to charge US cards and ship to US residents for CBD do need to consider far more in terms of options than site owners engaged in simple Canadian to Canadian B2C sales. Contact us to learn more
Processor specifics and requirements for high-risk online sales
As we explained above, any website selling CBD products is selling what’s called a high-risk product. Similar to, for example, FFL to FFL transactions, tactical products, or vape sales, you’ll need to meet specific criteria before accepting credit card payments. The reason for this is that your industry undergoes a significant degree of legal scrutiny and regulation. This carries with it a higher risk both to your business and to merchant account providers. These elements apply to the hemp industry and the CBD market as well.
Below are a few elements you need to keep in mind when setting up your online CBD store.
Specifics and requirements for online CBD and hemp oil sales
Be careful what products you sell through your credit card processor. While there are card processors that work for CBD oil and hemp-based products, you need to be careful to read the fine print. At the same time, you need to be sure that your products cannot be interpreted or defined as a marijuana product. This means that you need to check that the products you intend to sell are allowed by the Controlled Substances Act, administered by the United States Department of Justice, Drug Enforcement Administration. Our trusted, independent agents can go over the processor agreements with you in detail – just contact us to get started.
Only sell hemp or CBD products through your CBD processor account. You want to make sure that you only process products that fall within the specific criteria outlined when you applied for to the card processor. Many will outline that only a particular product type is allowed to be processed through it. In other words, if you sell pipes, glassware, or other paraphernalia, you should use a separate payment gateway or credit card processor for these different product types – likely on a different URL. Some products, like vape and CBD, can be combined, but it depends on your business. Again, contact us with any questions.
Make sure your products meet legal and processor requirements. As a high-risk merchant selling products with many regulations and legal scrutiny, your products must meet all relevant requirements. This includes that your CBD products have less than 0.3 percent tetrahydrocannabinol (THC) by dry-weight. Your products also need to be in line with all local, state, and federal regulations. You need to consult a qualified attorney before selling CBD online – we are not attorneys, and you should not consider anything on this page to be legal advice.
Your distributor needs to be licensed and should be local. It’s important for you to know that you should only buy cannabidiol/CBD from distributors licensed within the state you’re operating from. Additionally, most processors do not allow you to ship or deliver your products outside of the United States.
Get legal counsel when starting your online CBD shop
It’s worth stating again: we are not lawyers. While we do have experience helping many CBD and hemp oil merchants sell online, we are not legal experts. You should always seek legal counsel when setting up a business that sells products that are highly and carefully regulated. If you need assistance getting in touch with someone, we might be able to help. However, our advice above should not be considered legal advice.
Using a qualified attorney who specializes in your industry and e-commerce law – before you start – is always a good idea. If you need a recommendation, we are happy to help when we can. Reach out anytime.
CBD payment solutions through major e-commerce brands
Recently, we’ve become very familiar with a few CBD payment solutions that work with all major web platforms, including BigCommerce and Shopify. However, identifying the right solution and combination of payment gateway, shopping cart, and site-builder is no cakewalk. In other words, please don’t hesitate to get in touch. You don’t have to sift through endless terms and conditions before getting an overview of your options. Our trusted, independent agents are always available for a free, no-commitment talk about your business and the alternatives you have at your disposal. Get in touch with us for a simple chat about how you can start accepting payments for your CBD e-commerce site today.