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Merchant Account for CBD Oil, Cannabis Oil, Hemp Lotions, and MMJ Dispensaries Industry

Obtaining a merchant account has become an essential step in establishing a business. Businesses of all sizes irrespective of the industry to which they belong benefit from a merchant account. These are the type of accounts that allow business owners to streamline all their payment channels. Opening a merchant account is an easy process. Most banks offer merchant accounts at good rates. And there are also several reputed credit card processors that businesses work with. That being said, if you are the owner of a business dealing with CBD oil, cannabis oil, hemp lotions or even MMJ dispensaries, the situation might be slightly different for you.

Online merchants and the other factors that cause trouble

Online merchants dealing with cannabis and hemp related products face even bigger hurdles when they have to open a merchant account. To begin with, validating the credibility of online merchants without a physical store of operation is complicated. All the payments made would be a card, not present cases. And there are some businesses that even offer product subscriptions for cannabis-based medications where recurring billing might have to be handled. All of these factors are seen as risk factors by the banks and conventional credit card processors.

The application gets rejected at the banks and credit card processing companies

When a hemp-based or cannabis-based product selling or manufacturing business approaches a bank or a credit card processor, the chances of the application being approved are bleak.

Chargebacks are huge when a majority of the payments take place online. This might be due to the refund policy established.

The major factor contributing to the risks in this industry is the legislation. There are national and local laws governing the cultivation, extraction, processing, and sale of the cannabis and hemp related crops and products. So the reputed credit card processors hesitate to get involved with such businesses for the fear of violating the law.

Though there have been numerous advancements in the research connected with hemp and cannabis there is still a lack of clarity in several places. This is an emerging field and there is the risk of illegal sale of the products. These are the type of products that are also likely to be sold without prescriptions without records. Intake of these medications without prescriptions or overdose can all lead to serious consequences. Any of the business involved from the manufacturing stage to the pharmaceuticals selling them can be sued for the consequences. Such legal risks involved in this business is another major factor that turns off the banks and other agencies,

For several such reasons the application that these businesses submit for opening a merchant account might be rejected at first glance. Some of the credit card processors daring to take the risk might impose disparity based on the High Risk vs Low-Risk category of businesses. So the merchant account might turn out to be expensive to maintain. What is the solution? If you own a business in this industry it is a good idea to approach a merchant account provider who specializes in high-risk businesses. Look for the track record in handling hemp and cannabis businesses and submit your application for a merchant account.

Startup ok merchant account providers

The other detail to verify before finalizing the merchant account provider is to check whether the merchant account Rates Vary by Startup vs History of the business. New businesses are difficult to understand. So without the ability to precisely project the performance of the startup some of the merchant account providers might offer larger fees for the new businesses. This can be a heavy financial burden for startups. So choose a merchant account that has the same type of fees attached no matter what the history of the business is.

Why should you choose a high-risk merchant account provider?

  • All the features including the option to avail and monitor a secure payment gateway can be availed from day one. So the business would be able to increase the customer segment by allowing several modes of payment.

  • These are merchant accounts that can handle businesses of any size. So these scalable accounts can grow with the business.

  • The application process involved in opening the merchant account is quick and inexpensive. There are no application fees charged for initially submitting the application.

  • Once the paperwork is taken care of the opening of the account takes very little time.

  • There is a high approval rate and therefore you would not have to worry about finding alternatives if your application is rejected.

  • Any website based businesses or e-commerce sites would be able to make use of this merchant account as conveniently as physical store operated businesses.

  • There is a friendly team of customer care representatives who help those interested in opening a merchant account. The process is straightforward and the team is there to answer all the process related queries.

Which is better for your business- offshore or domestic merchant account?

When you choose a high-risk merchant account provider you also have the option to choose from offshore and domestic merchant accounts.

Businesses like cannabis and hemp related are legal in several parts of the world. So if you choose an offshore account in a country where legislation is clear then your work gets simpler. This also has an influence on the taxes imposed and other factors. Besides all this, you also get to integrated international payments with the help of this offshore account.

If you are looking for a simpler account one that is also inexpensive then you might find a domestic account to be a better option. This can easily be monitored from your place and you would also have to bear lower rates than in the case of offshore accounts. These accounts are the most commonly chosen options. Several small business owners find this to be an economical choice for their low budget merchant account requirements.

You would, therefore, be able to choose from a variety of merchant account types based on what your business requires.

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