CBD payment processing is considered high-risk, and the rates that the banks charge for CBD merchant services reflect that. The standard rate for domestic CBD payment processing is between approximately 6-8%. Plus, in addition to above-average CBD merchant rates, the banks that CBD merchants do business with, whether they're domestic or offshore; most of them are going to require a reserve. Even if you have a seven-figure net worth, it can still take time to get approved for CBD processing, and the banks might require as much as a 10% reserve.
This means that 10% will be taken out of every transaction your make for six months. If you do $5k in sales, the bank will take $500 that you will not see for six months. Unfortunately, there's no of avoiding this. That's what payment processing is right now in the CBD space. Understandably, this stringent criteria makes it difficult for many new CBD businesses to startup. Still, if you are going to be in the CBD retail industry, you must make sure you have a CBD processor that specializes in CBD and high-risk processing! These are the facts, and you shouldn't believe any company that tries to tell you otherwise.
Does Gaming the Processor Really Work?
You may think that you can sneak and choose a low-risk processor, lying about the nature of your business and the products that you sell, but it's not worth it! The consequences when you get caught are too far-reaching and too long-lasting. Besides, you'll be shut down in 24 hours if you are accepting credit cards online. If you are selling CBD in a brick and mortar establishment, you can get away with accepting credit cards longer, but again, it's only a matter of time before you get caught!
If you are an existing CBD business, and you have CBD payment processing under false pretenses through a low-risk processor, you need to think about what you are doing! Contact Alternative Payment Systems and sign up with for high-risk payment processing. Again, if you are an existing CBD business, you're not going to come under the same level of scrutiny and compliance as a new CBD business, and a physical location will not come under the same scrutiny as an online CBD business, but everyone gaming their processors gets caught eventually! It' isn't worth it.
Even Though it's Hard, You Should Still Do it Right
Getting started with online CBD payment processing is a challenge, and it requires a bit of a financial investment upfront. Still, it's never best to cut corners or cheat. Even though it can be incredibly stressful trying to get approved for a CBD merchant account. You'll be glad once it's over and you have a reliable processor on your side. In the meantime, don't fool around with payment processing! Make sure you have a processor that does CBD processing. Alternative Payment Systems can help! Call us today.