Updates on CBD payment gateways: a high-risk spotlight –
Tasker Payment Gateways works to assist all legal businesses with payment gateway solutions and merchant account recommendations, this includes highly regulated products such as legal CBD. 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 the status of the CBD processing industry and where we expect it to go from here.
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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 (if you are big enough)
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 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 a 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.