How to Get a CBD Merchant Account?
For many years, CBD’s reputation was not good among the masses as they often confused it with marijuana. But today, things have changed as businesses as well as people are waking up to the benefits of CBD. Many business owners are cultivating hemp to produce CBD for commercial purposes.
But CBD is a high-risk industry, which limits the number of merchant providers for this business. This results in higher processing costs. Also, there is an increased barrier for many small business owners to get a merchant account. If you sell CBD products, it’s good to have an established history of success and profitability to get a CBD merchant account. But what is a CBD merchant account? What do you need to have to obtain a CBD merchant account? Let’s find out.
What is a CBD Merchant Account?
A CBD merchant account is a type of credit card terminal made explicitly for merchants who want to sell high-risk products like CBD. Most providers will not accept such types of transactions, but those who do have been known to take special precautions with their customers. They involve multiple parties in an order’s process and inspect the company’s finances before approving it.
It isn’t easy to get a CBD merchant account because the CBD industry is considered high-risk. The high-risk label is typically due to the business being a reputational and legal risk for banks and lenders. Many people think CBD product sales to be high risk in the online merchant account world due to the nature of how it is cultivated. However, it is essential to know that CBD is a legal product. While banks still consider the industry high risk, other banks are opening their doors to the industry and no longer consider CBD merchants’ high risk. They have opened their doors for CBD merchants who sell the following:
- Supplements & Vitamins, Beauty Products, Tinctures & Cannabidiol Oil
- Pet Products & Treats, Isolates & Hemp Oil, Vape Oil & Pens (Retail Only)
- Edibles & Gummies, Creams & Topicals, Sprays & Pain Relief
- Terpene & Extracts
How to Get a CBD merchant account? Before we tell you how to get a CBD merchant account, it is essential to know why there is a need for a CBD merchant account?
Why is there a Need for a CBD Merchant Account?
Many businesses who deal with CBD could just accept cash, like plenty of other CBD businesses, but it limits the customer base. But today, accepting credit card payments is no more optional but has become essential. Each customer you have to turn away because of your inability to accept credit card payments is a loss. It’s a fact that CBD merchants who accept credit cards typically see a 20% higher revenue than their cash-only counterparts.
Each customer you turn down will probably not come back again, assuming that you can’t accept credit cards, even if you begin to accept them later. Each lost customer could turn into tens of hundreds of dollars lost in future purchases by assuming that you don’t accept credit cards.
So, accepting card payments through a CBD merchant account will result in countless purchases from you, boosting your sales. It will let you realize the income potential that CBD payment processing gives you. Customers will know they can use a credit card and will come back to your business because of that convenience. Hence, it is important to have a CBD merchant account to accept credit card payments and make things easier for your customers.
How to Apply for a CBD Merchant Account?
CBD merchants of all sizes are welcome to apply for a merchant account. Whether you are a startup CBD merchant, a mid-sized business, or a huge company processing millions per month, you can get a CBD account easily. You need to submit the application form and supporting documents. After that, you need to wait for account approval.
You will require the following documents to get a CBD merchant account:
- Company registration information
- Voided check from the depository account
- Government-issued ID, such as a driver’s license
- Details on the products being sold
- Bank statements from the last three months
- An SSN (Social Security Number) and/or EIN (Employer Identification Number)
Conclusion
As a part of a high-risk industry, you need to look for the most favorable merchant accounts available for CBD payment processing. Your chosen payment processor must be capable of protecting your business from merchant account closures, fraud, and chargebacks. Now that you know how to get a CBD oil merchant account, apply today and make things easier for yourself as well as your customers.
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