CBD merchant processing can be a challenging thing for business owners to secure. As a CBD product seller, you are considered a high-risk merchant, which will require a specialized merchant account and payment processor. Unfortunately, not all payment processors or banks are willing to provide CBD merchant account services to businesses that they consider high risk.
In addition to the specifics of your business, there are different laws and regulations in various countries regarding the sale and purchase of products containing CBD. If you’re going to be a merchant in this space, it’s important to keep yourself updated on trends and new laws that affect your consumers and your business. Furthermore, if you want to sell your products overseas, you need to stay current on the legal and social changes abroad.
Issues with CBD in Europe
The European Union has laws to protect and allow the free movement of goods between member states. One exception to this policy is any products, such as narcotics, that negatively impact public health. Anything deemed as a narcotic may only be traded under medical supervision and for medical purposes.
Some of the other specifics around CBD products include how the products are derived and produced. For example, some EU states will only accept CBD derived from the stems and seeds of the plant, but not oil that comes from the flower. Since each state is different, it can make selling your products extremely complicated.
A 2014 dispute in France began when the French government took legal action against the producers of KanaVape, an e-cigarette that uses CBD oil derived from hemp flowers imported from the Czech Republic. The French authorities banned the marketing and sale of hemp-derived CBD products and penalized businesses that attempted to do so.
However, in November of 2020, the CJEU (Court of Justice of the European Union) ruled that the French ban was inconsistent with EU regulations. It also deemed that CBD is not considered a narcotic, meaning the free movement of CBD goods between EU states cannot be prohibited. Therefore, as long as the CBD is legally produced in another member state, its sale cannot be banned by a member state.
A Boost for the CBD Industry
The CJEU ruling that the French ban was illegal provided a much-needed boost to the CBD industry in Europe and worldwide. During the evaluation and ruling of the case, several key statements were made that helped the CBD industry gain more traction. Some of these statements include:
- Confirmation that there is no scientific evidence to suggest that CBD is harmful to the human body
- Statement by the World Health Organization that there is no evidence of public health problems linked to the use of pure CBD
- The CJEU ruling could be used as a precedent for other lawmakers in other member states to update their regulations to follow suit.
As the CBD industry continues to gain traction worldwide, the opportunities for online and brick-and-mortar businesses continue to grow. If you’re already in the CBD business or looking to get started, you will need to be extra vigilant in how you set up your website and your marketing campaigns. You will also need to understand the options available to you for payment processing.
How to Accept Payments for CBD in Europe
When looking for a CBD merchant processing service for your business, various things are to look for. One of these is whether or not the processor has the ability to process payments in other countries. Since every country has a different set of CBD laws, you will need to understand which countries your payment processor cannot accept payments.
Payment Gateway Options
Here are some great options for payment processors that can help you get moving in the right direction. Each one is a little bit different and offers slightly different services. Depending on how your site is set up, there will likely be one processor that fits your needs better than the others.
This is an excellent and fairly sophisticated processor. It comes with plugins for WordPress and WooCommerce sites and is also Shopify compatible. In addition, it can support subscription-based services, which are very popular in the CBD industry.
However, WorldNet is very particular about who its merchants are. To be a merchant with World Net, you must be a member of the Cannabis Trade Association (CTA) or the European International Hemp Association (EIHA) to use them on your site.
Allied Payment Gateway
This is a white-label payment processor, meaning their branding never shows up on your site. However, it allows you to customize the look of your payment processing page 100%, which is comforting to consumers who may not want to be redirected to another website to enter their payment information. In addition, NMI can connect you with affiliate partners who can provide the right merchant account for you, as well.
This processor is highly customizable and can integrate with nearly any type of website, web host, or merchant account available. In addition, they accept a variety of international currencies, along with major credit cards worldwide.
We Tranxact a great processor if you’re doing one-time sales rather than subscription services. They accept a wide variety of merchants from low risk to high risk, so your CBD business is acceptable for their portfolio as long as it meets their criteria.
This processor cannot be used with WordPress-hosted sites but can be used with both Shopify and WooCommerce. They offer merchant accounts and payment gateways to their clients, along with other services. One unique service they offer is evaluating your site to ensure it’s compliant with Visa and Mastercard requirements and is ready to present to the merchant bank’s underwriters.
A payment gateway through Paytriot is compatible with WordPress and WooCommerce sites. Paytriot is not compatible with Shopify. They accept one-time payments, as well as subscription-based payment models.
One of the great things about Paytriot is its ability to accept international currencies and payments. So if you’re a US-based merchant and you want to sell your products in Europe and other countries, Paytriot is definitely a processor to take a look at. Another great thing about them is the quick account setup. You could be up and running in just 72 hours.
Types of Payment Services Available
We’ve listed a few of the best payment processors, but our list is not exhaustive by any stretch. So if you do some research or even a consultation with each of these processors and still don’t find what you’re looking for, keep searching. There is bound to be a processor who can handle your specific needs.
While consulting with different payment processors, consider the types of payments you’d like to accept and make sure they have that capability. Some of those might include the following:
- Credit / Debit Cards
- Bank Transfers
We would be remiss if we didn’t offer a few pro tips in this arena to help you get started. The CBD industry changes at such a rapid pace that it’s hard to keep up. However, here are a few tips that are sure to get and keep you in business.
- Do not make claims. Your website should not have any claims about the benefits of CBD, or you risk being denied a merchant account. Likewise, don’t directly address “stress relief,” “reduction of inflammation,” or other such medical claims.
- Avoid chargebacks whenever possible. This is a good practice in general, but especially in a high-risk business like CBD sales. Be sure to have an area on your website where consumers can contact you for returns and refunds. This shows the merchant bank that you are a responsible business person and will refund the customer’s money if requested. It will help mitigate chargebacks, which in turn will help your account stay open.
- You can only sell in countries where it’s legal. As mentioned earlier, some countries do not allow the sale of CBD to their residents. Be sure to research and understand where you can and can’t sell your products.
The CBD industry is growing quickly and can be a lucrative investment of your time, energy, and passion. First, however, it’s important to play by the rules and understand your business’s regulations. Finding the right merchant account and payment processor who can walk you through the process is a valuable tool. Find and develop that relationship first, and the rest should be fairly straightforward.
Cristopher Carillo is the co-founder of Allied Payments. Allied Payments specializes in providing affordable online CBD merchant account services for businesses in the UK, EU, and the USA.