- Cannabidiol (CBD) is a chemical extract or oil found in hemp or marijuana but does not contain the THC level that produces a “high”.
- CBD eCommerce sales in the US are forecast to grow from around $2B in 2021 to more than $6 B by 2026.
- Popular and current CBD-infused products include food, drinks, wellness, and beauty products.
According to various studies, approximately one-third of Americans have tried CBD products. The CBD market is hot, and many online CBD merchants are working to meet growing consumer demand. In fact, CBD sales in the US eCommerce space are forecast to grow from $2 billion to $6 billion in five years. As an online CBD seller, you should know the importance of working with a payment processor who can take on high-risk clients. You should also look for a processor that provides its services at reasonable rates so that you can maximize profits. At Segpay, we’re proud to work with online CBD merchants, and we’re here to provide the fraud mitigation, fast payouts, and other services your business needs to thrive.
Let’s take a look at everything you need to know when choosing your online CBD payment processor, from the importance of choosing a high-risk merchant account to working with a company that understands the ins and outs of CBD legality in today’s market.
What is CBD?
CBD, or cannabidiol, is a substance that occurs naturally in both hemp and marijuana plants. CBD is sometimes confused with THC or tetrahydrocannabinol. THC has a psychoactive effect, while CBD does not. Many CBD products, however, continain a low level of THC that is not removed during processing.
CBD is used by many people who are interested in pain and anxiety relief. Hemp plants have a much lower concentration of THC than marijuana plants. It’s important to note that some CBD derived from hemp plants may contain small amounts of THC.
There are many CBD products on the market today, including salves, tinctures, oils, drinks, gummies, beauty and wellness products, and more. People who are interested in using natural methods to boost their health often turn to CBD products before using Wester pharmaceutical options.
Is CBD legal?
Yes, following the December 2018 Farm Bill legislation, hemp-derived CBD is now legal throughout the United States. If your business uses marijuana-derived CBD instead of hemp-derived CBD things can get a little trickier.
In the United States, CBD products are considered supplements, much like vitamins that can be purchased at a drug store. This means that the FDA does not regulate CBD products.
While this reduces the amount of red tape CBD sellers need to go through in order to get their products into the hands of their consumers, it’s also important that sellers are careful not to make outlandish claims regarding the capabilities of CBD. The FDA is cracking down on companies making lofty claims about CBD products, so it’s important that merchants use careful language when describing how their products can help customers with their health needs.
What Should You Look for in a CBD Payment Processor?
If you sell CBD products online, it’s important that you work with a payment processor who understands your unique need. You’ll need a processor who works with high-risk merchants.
There are several reasons why the CBD business is considered high-risk for payment processors. There are high chargeback rates associated with CBD sales, and some payment processors find that they end up with high levels of return payments due to unsubstantiated claims (which the FDA is working to regulate). There are also some issues with the legality of CBD in some states, mainly when distributors sell CBD derived from marijuana plants instead of hemp plants.
How Should You Choose a CBD Payment Processing Company?
When choosing a CBD payment processing company, it’s important to work with someone who understands your unique needs as a CBD merchant.
When you’re searching for the right CBD payment processor you may find that many high-risk merchant accounts come with high fees, and it can be helpful to shop around for a CBD payment processor with lower fees than other companies.
It can be tough to find a processor that has a high level of experience working with CBD merchants. When searching for the right payment processor for your online shop, look for someone who talks about THC levels and percentages on their websites and understands the ins and outs of the complicated legality surrounding CBD products.
You’ll also want to find a processor that offers high-level customer support, easy website integrations, and short term contracts so that you have time to discover whether the processor is right for you without being locked into a longer term contract.
What Kind of Documentation Will Your CBD Payment Processor Need?
You’ll need to provide your CBD payment processor with information to let them know that you’re running a legitimate online CBD business. As a merchant, you’ll need to provide a bank letter or voided check so that the processor is able to deposit customer payments into your account. You’ll need to provide lab results (COA) to show your processor that you’ve done your due diligence to ensure that the THC levels of your CBD products are within legal limits.
Why Choosing a High-Risk CBD Merchants Account is Key for Online CBD Sales
As a CBD seller, it’s important that you protect your business by choosing a high-risk merchant account with your payment processor. This is key to help you deal with any legal issues that you may encounter as you sell CBD and to protect you in the event that your product claims are disputed.
At Segpay, We're Here to Help with Payment Processing for CBD
We understand the needs of online CBD merchants, and we’re here to work with you to provide you with the simple, high-risk merchant account that allows you to feel comfortable and secure as you serve your customers.
Segpay offers a simple on-boarding process and fast payouts that allow you to keep your focus on running your business, instead of worrying about how or when you are going to get paid.
We offer several CBD online payment services for high-risk sellers, including:
- Merchant services
- Payment processing
- Fraud Protection
- Marketing tools
- EU merchant services
Our low processing fees and excellent customer service will keep your business on track. We’re here to take care of the ins and outs of online payments while you work to provide your customers with high-level effective CBD products. With more than 50,000 active clients , you’ll find that Segpay is the right choice for your online CBD credit card processing.
Want to learn more about your CBD payment processing options?
Contact us today, we’d love to chat with you about annual vs monthly subscription payments and which is best for you. It’s another way we are here for our merchants All the Way to Paid ™. Reach out to us with your questions at [email protected]