CBD is one of the most potent ingredients to be grown in cannabis plants and sourced directly from the plant material, and the CBD industry is growing bigger, more valuable, and more popular with every passing day, with countless CBD businesses launching all kinds of CBD products like oils, edibles, creams, lotions, and tinctures, too.
Setting up a CBD business can be a great way to get in on the ground floor of this ever-evolving industry, but it can also be quite a difficult process. There are lots of rules and regulations you need to be aware of when getting involved with the CBD industry, and you also need to cover the financial side of the operation with the help of a CBD merchant account.
But what is a CBD merchant account? How does it work and how do you get your own merchant account for CBD businesses? Well, this guide will cover all you need to know about CBD merchant accounts, including what they are, how they work, and why they’re so vital in the CBD industry right now.
Before we get into the ins and outs of obtaining and using a CBD merchant account, let’s first look at what the CBD industry is actually all about. CBD stands for cannabidiol. It’s a naturally occurring chemical constituent, otherwise known as a cannabinoid, found inside the cannabis sativa plant and produced en masse by CBD and hemp manufacturers.
Hemp and cannabis plants can be treated with solvents or in other ways to extract the CBD, and studies have shown that CBD can have different effects on both humans and animals. Some studies suggest that it may be able to assist with mental health conditions like anxiety and depression, while other medical uses of CBD include pain relief, nausea relief, and appetite stimulation.
There are many potential uses of CBD, both medically and from a general wellness perspective. This has led to the rise of the CBD industry and the relaxing of laws regarding CBD in many states and parts of the world. Nowadays, it’s legal in many places for people to buy, sell, and use CBD products like oils and edibles.
Since this industry has become so popular and has a lot of room to grow and develop in future, it offers a lot of potential for any entrepreneurs who want to join up with one of the fastest-growing movements in the health and wellness world. However, to properly run a modern CBD business, you’ll need to get a CBD merchant account.
In order to start a CBD business, you need to set up a CBD merchant account. A merchant account is essentially a type of business account that allows for the processing of electronic payments by credit and debit cards. In other words, a CBD merchant account is what makes it possible for your customers to pay you online or over the phone.
This type of payment is called a card-not-present transaction, and CBD merchant accounts make these transactions happen; when you have a CBD merchant account all set up, money from your customers will travel from their accounts and into the merchant account for processing, before carrying on and ending up in your main business account later on.
In a way, the merchant account acts as a kind of “middleman” for the transaction process, passing the money from customer to business. And in today’s world, a lot of CBD purchases are being made online in this way, with many people shopping online for CBD oils and edibles, so you really have to have a CBD merchant account if you want to keep up with the competition.
So, it’s clear to see that getting a CBD merchant account is essential when starting CBD businesses or running an online CBD store. However, these accounts are not always easy to obtain. You can’t expect to simply contact your usual local bank and request a CBD merchant account, because most banks don’t want anything to do with the CBD industry at the moment.
CBD is seen as a high risk industry by many financial institutions. In some cases, this is purely due to the fact that the industry is new, the products have not been completely tested and proven, and there’s still a lot of stigma and negative associations to do with marijuana. So some banks just don’t want to be associated with such a controversial industry.
In other cases, banks refuse to work with CBD businesses because of the high rate of chargebacks for CBD products. A chargeback is when a card payment is disputed and has to be refunded to the cardholder, which leads to extra fees and charges for the bank itself to deal with. There are a few potential reasons why chargebacks can happen in the CBD industry.
One reason is the fact that CBD isn’t properly regulated, so the industry presents a lot of easy opportunities for scammers to prosper and trick people into buying CBD products that won’t actually work for them or aren’t made with good quality ingredients. Other issues include buyer’s remorse or people just not being satisfied with CBD and wanting their money back.
So what can you do if you’re setting up a CBD business and need to get your own CBD merchant account when all the banks around you are saying no? Well, there are banks and payment processors out there who are willing to help you with high risk credit card processing for your CBD business, and Shark Processing can help you find them,
At Shark Processing, we specialize in high risk payment processing, helping high risk businesses, like those in the CBD industry, get the merchant accounts they need. We can help you find the perfect CBD merchant account with the very best rates from one of our trusted banking partners. Get in touch today to find out more about our CBD merchant account services.