CBD Merchant Account Information
Health experts are finding the benefits of cannabidiol are extraordinary. CBD is a promising treatment for epilepsy, forms of cancer and depression, among other ailments.
We at PPay think the future is unlimited for the CBD industry, and we’re hardly alone.
Since it is manufactured from the hemp plant, however, it is considered a high risk industry, and securing payment processing for CBD businesses is challenging. With that said we have establish a few ground breaking processing relationships that are up to the task.
Ideally the following list is “the perfect recipe” for CBD account setup with PPay.
- Healthy Processing History
- With all high-risk merchant accounts, having a lengthy processing history is always good. For CBD merchants, banks like to see at least six months’ worth.
- High Volume
- Bringing on a high-risk merchant needs to be a worthwhile investment for a bank, please note this comment directly from our Acquirer “$100,000 per month or above in processing is what banks want to see.”
- Strong Financials
- A while back, we read about how medical and recreational marijuana was drawing the interests of many venture capitalists. Surely, merchants don’t need to be VCs to open a CBD merchant account, but banks want to see a business bank account with a healthy balance.
- Get an EU Registration
- At the moment, PPay has only international banking solutions for CBD merchants. Hence, merchants need to obtain an EU registration, something PPay can help with.
- Few Chargebacks
- Underscoring healthy processing history, a CBD merchant’s chargeback rate simply must be low. We often talk about chargeback mitigation, which takes some effort, but there are a number of small steps a merchant can take to reduce chargebacks.
(However if you do not have all of these requirements, we are able to place your business on our all purpose sub-merchant account structure)
Why CBD Oil Is Classified as A High-Risk Industry
Acquiring banks categorize CBD oil as a high-risk industry since it is derived from the hemp plant, even though it contains barely traceable amounts of THC, the psychoactive, pain-killing component of marijuana. Because the possession, sale and use of marijuana remains illegal by federal law, some acquiring banks are leery of offering payment processing solutions for such, despite the many health benefits of CBD. With that said PPay has established a few ground-breaking processing relationships that are up to the task.
Will Payment Processing for CBD Ever Get Easier?
We think it eventually will, and here’s why: Because it is tied with marijuana, banks will always view CBD businesses as a risk. However, with continued evidence of health benefits, as well as continued investment by VCs, we believe banks will, in time, view the industry with less risk.
In the meantime, PPay, a long-time provider of high risk merchant services, can offer CBD merchant account options. Contact a live merchant account manager for a free CBD merchant account consultation at 1-800-969-0970 or by emailing firstname.lastname@example.org.
PPay’s solution is available for e-commerce and MOTO businesses equally.
Business bank statements from the last 4-6 months required showing company name, total sales, chargebacks/refunds and returns.
Merchants must generate a minimum $1,500 per week in processing.
Startup businesses will be vetted on a case-by-case business.
CBD Merchant Account Approval Timetable
The time it takes for CBD merchant account approvals varies with each merchant and their processing history. With all the supporting documentation and materials, PPay can provide a credit card processing solution between 5-15 business days.
What Are the Fees Associated with CBD Merchant Accounts?
The fees PPay charges depend on several factors, such as the merchant’s processing history, type of industry (high risk or low risk) and/or projected sales volume.
Each merchant account is unique, but typical fees include:
- Compliance Fee: PPay requires a compliance fee to accompany every application for a CBD Merchant Account. The reason for this is simple. There is a tremendous amount of work that goes into arranging merchant accounts of this nature including legal fees, travel expenses, the vetting process for banks, not to mention the due diligence required in the processing of each merchants application. Although PPay certainly does earn a small income from the actual processing fees attached to these accounts, these fees are never significant enough to cover these costs.
- Merchant Discount Rate (MDR): Range between 9% and 15% based on history volume and operational stability.
- Per Transaction Fee: $0.35 to $0.95 per transaction depending on volume
- Monthly Statement Fee: $29.95 per month
- Monthly Gateway Fee: $125.00 per month
- Six-month Rolling Reserve: 5% to 10% and is returned to the merchant after 180 days based on history volume and operational stability.
- Chargeback Fee: $95.00 for chargebacks less than 1% of gross sales or volume. And significantly higher if above this threshold.
- Refund Fee: Refunds performed by the merchant – $10.00. Refunds performed by PPay customer service – $40
Payment Gateway Integration for CBD Merchant Accounts
Every merchant account approved by PPay and its acquiring banking partner includes access to the approving bank’s payment gateway. PPay’s trusted banking partners offer a secure payment gateway for all transactions, with which you will connect the bank’s API to your website.
If you would like us to send you the application just complete this form and submit it to us. The application document and Application Fee information will be sent to you directly.