As the CBD industry is poised to expand in revenue over the next several years, an influx of e-commerce stores have recently emerged to capitalize on the market. In an effort to meet the demand for CBD-based products, business owners across the globe have begun lining their physical and online store shelves with products such as CBD oils, supplements, and topical solutions. However, while it may seem easy to get from point A to point B, creating a CBD merchant account in this sector can be slightly more complicated than one would assume.
If you’re a business owner looking to start expanding your own line of CBD-based products, you may be wondering what options are available to you to start processing payments. Below, we’ve gathered a few resources for you to begin your search, including what to look for in a merchant account provider and who some of the best CBD merchant account providers are.
Finding a merchant account provider that will be a good fit for your CBD business is essential when it comes to the daily operations of your business. However, as a CBD oil business, you will be classified as a “high-risk merchant,” which can make the process slightly more challenging.
Here are a few things to look for when choosing the right high-risk merchant account provider for your CBD business:
As mentioned, as a high-risk merchant, it’s critical that your payment processor is equipped to handle high-risk transactions. Because the CBD industry is relatively new, it may be prone to fraudulent business activities and frequent chargebacks. This being the case, it’s wise to choose a merchant account provider that has extensive experience in high-risk businesses.
As a business owner, there’s nothing more frustrating than being forced to change your entire operation to integrate a new way of doing things. Not only is it time-consuming, but it’s a hassle that nobody wants to deal with and could potentially affect your business dealings with customers.
This is why it’s essential that your CBD merchant account provider enables you to integrate their payment processing systems with your existing platform to save you from needless headaches.
When running a business, the biggest concern will always be the bottom line. The same is true when it comes to finding a reliable payment processing merchant. When deciding which merchant account provider, your business will partner with, be sure to research any registration or service fees that could potentially detract from each transaction.
Another critical thing to consider is what type of contract each service provider offers. While each contract may look similar, some fees and clauses will differ. When looking over contracts, be sure to give yourself enough time to carefully review each document so that you know exactly what you’re signing and how it will benefit your business.
Last, but certainly not least, is customer support. When choosing a CBD merchant account provider, be sure to ask how they go about handling disputes or potential errors that may occur. While it may not seem important in the beginning, there’s nothing worse than having your payment processing system crash and not being able to speak with anyone to resolve the issue.
There’s a lot of competition in the CBD industry, and the same is true for merchant account providers, which means any competitive advantage is sure to help.
Now that you know what to look for in a merchant account provider, let’s take a look at a few tips that can help you get approved faster.
Before starting any business, it’s essential to check if any state permits or federal regulations must be followed regarding the sale of CBD related products. Merchant account service providers require a copy of all business licenses and permits when you apply for an account, which means these must all be organized before your application.
If you’re unsure about laws and regulations, be sure to check with your local government agency beforehand.
Before being approved for a merchant account, it’s crucial to maintain a good credit history. Any past bankruptcies, overdraft fees, or late payments can significantly decrease your chances of being approved.
Having a good credit history will not only make a favorable impression with your merchant account provider, but can also be helpful in the future.
Another helpful tip to remember when applying for a merchant account is to ensure your products or services have enough demand. If you’re unable to prove a certain amount of demand for your business, a merchant account provider may not think your business is worth investing in. Stable processing or transaction volumes only increase your chances of approval.
If this is your first time partnering with a merchant account provider, you may be required to pay slightly higher fees or abide by certain transaction limits. While they may seem like a burden now, they are put in place to help establish new accounts and protect providers from future losses. In most cases, they will be reduced over time.
Once you’re ready to start deciding between merchant account providers, get as many quotes as possible to help you gain a better understanding of which service is best for your company.
There are several things worth considering at this time, such as monthly minimum fees, startup fees, discount rates, reserve fees, and much more.
Getting as much information as possible upfront can help you make the most educated decision possible to put your company in a better position for growth.
While the CBD industry has shown significant growth over the past few years, the market is still relatively young, which means potential volatility. Although there is still plenty of skepticism, there are several health benefits and medical purposes for CBD, such as proven results of lowered cholesterol, balancing hormones, and mood stabilization.
Keeping yourself as educated as possible about your investment can help you make well-informed decisions down the line.
If you’re interested in learning more about how to get started with your high-risk merchant account, contact us today.