Building a CBD Brand: Why Your Merchant Account Can Make or Break Your Business

Want to learn how to build a successful CBD brand?

Every CBD business owner wants to drive sales and build trust with customers. After all, when your CBD business succeeds, you enjoy:

• Steady revenue
• Brand awareness
• Long-term growth potential

But here’s the problem.

If you can’t accept payments, none of that matters. Without access to the right CBD payment processing solutions, your dream business will never get off the ground. Banks view you as high-risk. Major payment processors won’t work with you.

If your merchant account isn’t setup correctly, you won’t survive long enough to realize your goals.

That’s why finding a top-tier merchant account for CBD with 2Accept is so important. You’ll learn:

• Why CBD payment processing is unique
• How the wrong merchant account can destroy your business
• What to look for in a CBD payment processor
• How to keep your revenue safe long-term

Keep reading to learn how to protect your business and your bottom line.

Why CBD Businesses Need Specialized Payment Processing

CBD products are everywhere. According to market projections, the global CBD market could reach USD $20 billion by 2025.

Yup. You read that correctly. $20 BILLION.

Right now, there’s never been a better time to get started with CBD.

But it isn’t as simple as slapping some hemp extract on store shelves.

Payment processors actively avoid CBD businesses. PayPal and Stripe forbid hemp transactions. Even if you somehow sign up, your account will get banned as soon as they realize what you’re selling.

Why?

Simply put, banks view CBD businesses as “high risk.”

Regulations change weekly/monthly. Chargebacks tend to run higher than other industries. Many banks (and customers) don’t fully understand hemp vs “other” products.

That said, several companies have turned to work specifically with CBD businesses. They know the industry. They have access to banks that will work with high-risk merchants. And they provide the stability you need to get paid.

The Hidden Dangers of the Wrong Merchant Account

So why does picking the right processor matter?

Your merchant account can make or break your business.

Believe me. I’ve seen it happen first hand.

CBD business owners join payment processors that seem to meet their needs. They start accepting payments. Building a brand new customer base. And then BOOM…

Everything comes to a screeching halt.

Their processor freezes their account without warning or explanation. They can’t access their hard earned money for months. Customers attempt to make purchases but are denied. Revenue? Gone.

A recent survey found that 73% of high-risk merchants experienced improved cash flow after switching to a specialized processor. While that is a positive stat, it also shows how many businesses were affected before they made the switch.

Here are just a few examples:

• Frozen accounts – many payment processors can hold your money hostage for anywhere between 30-180 days without giving you a reason why.
• Account termination – sorry friends, but “supporting” your CBD industry won’t last long if they detect marijuana related transactions coming through your account.
• Exorbitant fees – again, some companies take advantage of CBD businesses knowing that we have limited options when searching for a processor.
• Chargeback hell – if you don’t have the right protections in place, chargebacks can kill your CBD business.

Each of these situations are incredibly painful. But they’re 100% real for CBD businesses across the globe.

What Makes a Great CBD Payment Processor

Alright. How do you know who you can trust?

Pretty much all payment processors promise the world. But not all processors are created equal when it comes to CBD.

Here are some key factors to consider when choosing a processor:

Know Your Industry

CBD regulations vary from state to state. What’s permissible in California might land you in jail in Alabama. Pick a processor who understands CBD policies at both the state level and federal level.

Transparent Fees

Truth: high-risk accounts usually have higher processing fees. That’s just the cost of doing business when you work with high-risk merchants.

What you shouldn’t have to deal with are hidden fees. From the beginning, your provider should be upfront about costs. No surprises.

Provide Chargeback Protection

CBD businesses tend to have higher chargeback rates than most industries. People dispute charges for many reasons. From not feeling the effects of hemp to forgetting about automatic renewals.

You need a processor that offers tools to both prevent chargebacks from happening as well as help you manage them if they happen.

Have Strong Banking Relationships

This is by far the most important aspect of any merchant service provider.

You want to work with a CBD processor who has already laid the groundwork with supportive banks. Banks that understand CBD businesses and won’t hop on the bandwagon of denying accounts left and right.

How to Protect Your Revenue Long-Term

Securing a quality processor is only half the battle.

You also need to do your part to protect your merchant account.

Implement these tips to keep your account safe:

Keep Chargebacks Low

If your processor isn’t already telling you, high chargebacks equals a bad thing. Reduce chargebacks by managing customer expectations. Provide stellar customer service. And make it easy for customers to cancel subscriptions.

Stay on Top of Compliance

The last thing you want is your website flagged for FDA violations. Don’t claim your hemp products will treat, cure, or prevent disease. But you should have lab results easily accessible on your site.

Running a clean website and business will help you in the long run.

Monitor Your Transactions

Sudden spikes in sales can trigger fraud alerts. Try to grow your business at a consistent pace.

Wrapping Up

Ready to wrap this thing up?

Congrats on taking the steps to learn how to properly setup your CBD brand.

But remember, your merchant account is critical to your success.

The wrong provider will cause you to lose:

• Money – If your account gets frozen, you lose out on revenue. And money spent trying to find another processor.
• Time – Speaking of finding another processor. Don’t lock yourself into a 2 year contract with a company that doesn’t care about CBD businesses. Save yourself the headache and find someone who does.
• Customers – Can you imagine placing an order from your favorite CBD brand, only to have the payment denied? Frustrated customers won’t come back.

The right processor will set you up for long-term success. Give you reliable payment processing options. And allow you to focus on what matters… running your business.

To help jog your memory, here’s what you learned:

1. CBD is considered high risk due to…
2. Watch out for payment processors who…
3. When comparing CBD merchant accounts, look for…
4. Use these tips to keep your merchant account safe

Payment processing isn’t fun. But out of every decision you make for your business, it’s the most important.

Frequently Asked Questions

Why is CBD considered high risk for payment processors?

CBD merchants are considered high risk because hemp is federally illegal, banks are still cautious, and chargebacks are higher than normal.

Can I use my PayPal account to sell CBD products?

No. PayPal specifically prohibits CBD transactions on their website.

How long does it take to get approved for a merchant account?

Approval times can range from 24-48 hours to up two weeks. Each processor is different.

What happens if my chargeback ratio is too high?

You could lose your merchant account. You could be put on MATCH. And you’ll be forced to pay excessive fees. Prevent them before they happen.