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What to Do About Payment Processing for Your CBD Business?

Written by Alexandra Hicks

If you happen to be in the process of building your own, online CBD business, you’ve probably approached a bridge that’s rather difficult to cross: How to accept payments for your CBD business.

For any other entrepreneur, this would be a non-issue. They could set up an account through PayPal or with their local bank or credit union. But for anyone in the cannabis industry, even those working in CBD, accepting payments is not quite that simple. Most financial institutions view the industry as “high-risk” and are unwilling to let companies open accounts and take out loans.

Early on, many CBD companies were using PayPal for their transactions, only to have the rug swept out from under their feet when PayPal abruptly and without warning, closed many of their accounts. Business owners lost money and were left unable to conduct any transactions for their companies unless they found another solution. In Europe, the same is true for hemp companies as well.

You might be wondering how the recent Farm Bill approval comes into play here. Well, that only legalized hemp and hemp-derived CBD, not regular cannabis-derived CBD. Hemp is a type of cannabis defined as having less than 0.3% THC. For a financial institution, it can be hard to determine whether their client is selling hemp-derived CBD or cannabis-derived CBD, so they’re likely to decline the account all together.

This leaves CBD business owners stuck with few options for accepting payments, many of which are expensive, off-shore accounts. Some people might manage to convince a bank like BOA (Bank of America) to let them open an account, but since they aren’t used to dealing with these kinds of accounts, things might not run as smoothly as one would hope.

For now, a high-risk processor with cannabis experience is the best option for someone operating an online CBD business who wants to be able to accept payments; after all, what’s the point of starting a business if you can’t get paid? A processor who knows the industry would be able to stay on top of any issues that arise and they would adapt to changes quickly and efficiently. As we know all too well, industry regulations are constantly changing so it can be hard to keep up.

What to Look for in a Merchant Account Provider

In many ways, finding a good high-risk financial service provider is no different than finding a low-risk one in a regular business. You just need to find someone who offers the right combination of services and is willing to take you one as a client. Here are a few things to keep in mind when searching.

Pricing: Any high-risk merchant account is going to cost more than a low-risk one, there’s no getting around it. That being said, it doesn’t mean you have to get ripped off just to get your business up and running. A few things you may come across are tiered pricing models, processing rates, monthly and annual fees, and what’s known as a “rolling reserve”. A rolling reserve is where your processor withholds a certain percentage of your monthly funds until the reserve is met. It’s like an insurance policy for the processor. Although you’ll eventually get all your money back, rolling reserves can cause a bit of financial stress for small business that need most or all of their income.

Contracts: In this industry, its likely that you’ll have to sign a long-term contract with your merchant processor or be forced to pay an early termination fee. Contracts are typically for 3 years, but if you’re lucky you can find a 1 year contract. It’s also likely that your contract will include an automatic renewal clause, so make sure to keep a close eye on that if you don’t want to continue with that company.

Customer support: While this might seem insignificant in the grand scheme of things, be aware that you’ll most likely encounter a number of issues when starting your business. CBD and other cannabis industry companies often run into more challenges than other high-risk entities, so having a merchant account with superior customer service can really make or break the deal here. Below are a few companies to consider when starting your CBD business.

T1 Payments

T1 Payments opened in January of 2012 and is headquartered in Las Vegas, Nevada. They successfully process millions of weekly transactions for CBD companies, as well as offering same day merchant accounts, international payment processing, flat rate credit card processing, and a simplified underwriting process for new, established, experimental, and traditional e-commerce businesses.


Based out of Sherman Oaks, California, PaymentCloud has been in business since 2010. This company specializes in placing high-risk businesses – including those in the CBD industry. They rely on a network of third-party processors and banks in both the United States and abroad. Although they can’t place every company for one reason or another, they have one of highest success rates in the industry.

Easy Pay Direct

Easy Pay Direct hails from Austin, Texas, and has been in business since 2000. They offer merchant accounts for both low and high-risk business and are very experienced with the CBD industry. Their main product offering is their EPD Gateway where they set you up with a domestic bank or credit card processor, making eCommerce sales a much easier process than other companies. They’re also one of the few merchant accounts that discloses their rates for CBD customers online, so you know what you’re getting into before you contact them.

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About the author

Alexandra Hicks

Managing editor at Cannadelics and U.S based journalist, helping spread the word about the many benefits of using cannabis and psychedelics.