First Card Payments – CBD Merchant Account Solutions
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W ith the enormous growth that CBD businesses have experienced in the last several years, banks and ISOs see a budding new billion-dollar industry that they want to tap into. CBD businesses must be able to accept credit cards, just like any other industry these days. First Card Payments will guide you through all the twists and turns of this process in order to get you approved for not only a merchant account for your CBD business but a backup account as well.
The relationships with banks and ISOs we have fostered over the last two decades allow First Card Payments to provide excellent services and low fees to high-risk merchant accounts in the CBD industry and beyond.
Particularly related to financial partners, it helps to trust the people you work with; at First Card Payments, we offer that level of honesty and transparency. We take care of the payment processing and your CBD merchant account so you can focus on your business.
- Edibles, such as gummies and chocolates
- CBD lotions and creams
- Vape cartridges
- Food and water
- Bath and body
- CBD for pets
Why a CBD Merchant Account Is Tough to Find
CBD merchant accounts are not given to just anyone. The laws concerning the CBD industry differ from state to state and there is still a stigma attached to CBD because of its proximity to marijuana. Banks hesitate to trust these types of businesses.
Again, we know different, but the old guard in charge is struggling to change their views and until the world has caught up, it will be difficult for CBD business banking to be legitimized. Not to worry, that’s where we come in!
First Card Payments monitors CBD regulations throughout the country very closely. We anticipate changes and work to make sure that all CBD credit card processing is never interrupted.
We work on merchant accounts for CBD startups and multimillion-dollar CBD product manufacturers. Size doesn’t matter here; what matters is the integrated functionality to ensure you can accept and process payments for your CBD products.
Why Banks Hesitate to Approve CBD Merchant Accounts
Businesses in the CBD industry are finding it difficult to obtain a merchant account in part because it is not regulated enough. Banks and ISOs aren’t certain if a company is selling CBD that is within the 0.3% THC or less (which makes the product legal by FDA guidelines).
Some banks will provide merchant processing for CBD businesses, but they will only take a few clients at a time. When they have stopped accepting business, another bank will fly in and take on some business as well.
Unfortunately, not all banks are maintaining due diligence when underwriting these accounts. As a result, certain banks have stopped working with CBD businesses for now. Fewer banks are offering CBD credit card processing and the list for approval is long.
Lower Fees for CBD Merchant Accounts with First Card Payments
Just because the CBD industry is considered high risk doesn’t mean you should pay exorbitant fees for merchant services; however, the fees are somewhat higher than a traditional merchant account considered low risk by the merchant processing industry. One way First Card Payments helps your CBD business lower merchant account fees is by preventing or otherwise mitigating chargebacks!
For 99% of CBD businesses, we can cut fees by 25%.
The 2018 Farm Bill & How It Affects Your Business
Marijuana is considered a Schedule 1 drug by the FDA. CBD is not the same as marijuana and is thus treated differently by the government.
The 2018 Farm Bill stipulates that CBD, which has a THC level of 0.3% or less, is not considered a schedule 1 controlled substance; however, every state has different laws and regulations which they can change at any time.
Since CBD is not classified as a Schedule 1 drug, major banks and ISOs stepped into the CBD arena, approving all CBD accounts with the least amount of documentation possible–driver’s license, voided check, utility bill, and an application. Unfortunately, as each state’s laws differed, those who were approved for a CBD merchant account had the rug pulled out from under them due to the extremely light underwriting. Many were forced to cease all their CBD business.
Soon, different banks had different underwriting guidelines that may have included a charge of accounts, licenses from the Department of Agriculture, full product lists, and much more. The differences in these guidelines allowed banks to figure out better solutions for CBD merchant processing.
It’s a mess, but a very profitable mess. As mainstream businesses capitalized on the CBD craze, CBD has become a billion-dollar industry. Regardless of the current laws in your area, First Card Payments offers solutions for your CBD company.
Consulting Services for Your CBD Business at FCP
We are in your corner and we can help you figure out the financials of your CBD business.
Unlike our competition, we guide your business towards quick approvals and long-term merchant processing success. The success of your CBD business is our success as well.
The experts at First Card Payments work with you to strategize and make the most of your CBD merchant account. For instance, our chargeback prevention tips will help you keep those rates low so your business can benefit from lower fees. We will help you grow without being limited by merchant processing caps. We like to set our clients up with backup accounts, thereby giving you an added layer of protection if an account gets terminated for any reason.
Give us a call and experience the First Card Payments difference.
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Ensure you avoid chargebacks. We can help!
How to Apply for CBD High-Risk Merchant Account
While the debate regarding the legalization of marijuana continues across the country, the use of CBD, a vastly different product than marijuana, continues to be stigmatized as well. Although this alternative treatment has been controversial, many health experts have also described its health benefits, especially in treating depression and epilepsy.
If you’re running a CBD business, you may find it difficult to apply for a payment processor because you’re tagged as a high-risk merchant. But with these tips, you will not only make the application process easier, but you’ll also have a better chance of approval.
Describe products clearly and accurately.
One of the reasons CBD is such a controversial industry is that there are no proper regulations in place to ensure that CBD products are used only for medical purposes and not as an addictive drug.
So if you don’t want to be snubbed by banks and financial institutions, your product descriptions should be thorough, accurate, and clear. Most merchant account providers would only approve companies selling CBD products with less than the allowed 0.2% THC content in their product.
Build good credit standing.
Since you’re already in such a highly controversial industry, you don’t need any additional red flags to make banks question your credibility even more. If you don’t have a business credit score yet, this is the time to build one and maintain it so it’s easier for you to prove your credibility as a business.
Now if you already have a bad credit history, it’s important to improve the credit rating of your business. Pay off any pending debt, save up enough money in the bank and make sure that you don’t incur too many chargebacks because this could hurt your chances of getting approved for an account.
Prepare all the necessary documents.
Aside from the application, you also need to prepare some documents to help prove the credibility of your CBD business. These include a government-issued ID such as your driver’s license, three months of your most recent bank statements, your EIN or SSN, a bank letter or pre-printed voided check, and of course, a secure and fully operational website. Underwriters will look into these documents as they review your application for a CBD merchant account; having them handy will show banks that you are reliable, prepared, and trustworthy, which can only increase your chances of getting approved.
Look for the right payment processing gateway.
Finally, it’s very important to find the right payment processing partner to provide you with a high-risk merchant account. For one, your payment processor should be capable of handling high-risk transactions to avoid friendly fraud and high chargeback rates that could hurt your reputation badly. It wouldn’t hurt to find a payment processing gateway that can already provide you with point-of-sale (POS) if needed. First Card Payments will help you choose among the best POS systems for CBD stores.
You should also look for a partner that charges reasonable fees so you don’t end up paying more than what you’re earning.
At the end of the day, getting approved for a high-risk CBD merchant account will boil down to how prepared you are when applying for one.
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