Prior to starting Calm Coffee Company, I admit I was completely unaware that in the future, I would be writing a post about CBD payment gateway merchants. But here I am! This is a post to support other new businesses in their understanding of these merchants. So don’t be disheartened when faced with a hurdle in the final stages prior to launch, we can help!
I’m sure most readers, like myself, have purchased something from an online business in the past? Thought so! In fact, you have more than likely purchased something in the last week! Why is this? Because the payment methods are often very quick and easy to set up. Many of these businesses will use PayPal or Stripe for their transactions. I know I am personally finding the option of PayPal more and more frequently on websites! When it comes to the selling of CBD however, unfortunately it doesn’t come as easily as these other businesses have it.
This is because CBD is classified as ‘high risk’ in the eyes of the merchant accounts. Now this doesn’t mean the product is dangerous in itself, but it leads to a reduction in the available merchants willing to process your payments as a result of the alleged risk. I’ll explain the definition of this ‘high risk’ below, but remaining with the merchants, they then complete thorough background checks on the businesses themselves to make their own assessment on their credibility. Businesses selling any products that are seen to borderline illegality, or those who are susceptible to chargebacks on credit cards, may also be deemed as a ‘high risk’.
The terminology of being ‘high risk’ is simply due to the fact that CBD is a relatively new product to market. CBD was only provided its 100% legal status in the UK in 2019! The marketing of CBD has exploded over the past year and it’s hard not to notice its presence in the high-street shops. Despite this, there remains a lot of uncertainty around it, most likely because of the obvious association with the controlled substance, Cannabis.
CBD, also known as Cannabidiol, is derived from the Cannabis plant. However, it does not contain the THC content. THC is what’s associated with the psychoactive effect of the controlled substance. Despite this, because CBD is produced from the Cannabis plant, many merchants and processors will not support anyone who chooses to sell CBD. The Cannabis plant itself remains prohibited, which leaves banks uncertain, and therefore unwilling, to take the risk by associating with the product.
I have mentioned the explosion of CBD in the shops over the past year, but when it comes to purchasing it online, there are many restrictions faced by the sellers of CBD. Our well-known internet shopping sites like Amazon and Ebay both refuse the selling of CBD, and advertising through the social media platforms of Instagram and Facebook is banned. Somehow, I think this makes its escalation in popularity all the more impressive!
So, we know that many merchants are weary of the high-risk products. But all is not lost! There are some specialised high-risk merchant accounts, located all around the world, who are willing to support businesses selling the high-risk products, such as CBD. The merchants for CBD payment gateways will still complete a number of checks of the business prior to offering their services. However, these high-risk payment gateway merchants unfortunately come at a price in respect of their high set up fees, higher refund fees and higher payment processing fees.
At Calm Coffee Company, we unfortunately have had to learn the hard way in understanding the complexities around payment gateway merchants. We know first-hand the frustrations faced by new companies who have everything ready to go, then seem to stumble at the last hurdle of processing payments! We hope by sharing out knowledge, we can help others avoid the unnecessary headaches of payments – following what has probably been an uphill struggle to launch whatever your product! To support our wholesale customers in getting up and running without delay and complication, we have partnered with We Tranxact.
Because we work as a partnership, we have access to exclusive rates available to all of our wholesale customers. Some rates are below 2% with no setup fee, which is an absolute steal compared to other payment gateway merchants.
If you are looking for a CBD wholesaler, or want to start your own CBD brand with a white label service, we would love to be of assistance. We can support you from concept to creation! We have our own in-house website designer, graphic designer and marketer. We are also partnered with only the best suppliers to create high-quality products. Please email firstname.lastname@example.org with your enquiry.