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CBD payment processors

Four providers that facilitate digital payments for cannabidiol-focused businesses.

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Accept CBD payments with: Square

Square logo
  • Plans start at 2.6% + 10¢
  • $0 standard monthly fee
  • Free card reader for new merchants
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If you’re a business owner that sells CBD products, it can be frustrating to navigate the world of payment processors since not everyone will take you on. The key is to target providers that have a history of working with CBD businesses like yours — comparing rates and contract terms to find one that matches your needs.

Yes. Hemp-based CBD products are legal nationwide thanks to the 2018 Farm Bill that removed hemp from the Controlled Substance Act, according to the FDA. However, CBD is considered a high-risk market, so not every payment processor will allow you to sign up.

Why are CBD businesses considered high risk?

CBD businesses are considered high risk because hemp-CBD only recently became federally legal, and is still tightly regulated by the FDA. Evidence confirming CBD’s medicinal value is still pending, which is one reason why these products tend to have a high chargeback rate — customers may be dissatisfied with the outcome.

Payment processors are hesitant to take on CBD businesses due to the legal issues involved in quality control, as specific amounts of THC can be hard to regulate.

Finally, CBD laws can vary widely from state to state. For instance, the FDA still considers ingestible CBD products, such as gummies, to be illegal, even though some states have legalized ingestible CBD. Caveats like this make it tricky for many national payment processors to navigate the terrain.

Payment processors for CBD businesses

These payment processors have a track record of working with companies that sell CBD products.

Square

Square doesn’t charge monthly fees and you don’t have to sign a long-term contract. Transaction rates are clearly published on its website, starting at 3.9% plus $0.10 per transaction.

  • Get a magstripe credit card reader when you sign up
  • Customer service is available from 6 a.m. to 6 p.m. PT, seven days a week
  • Access to other merchant tools like payroll and inventory management

Takeaway: Best for startups and businesses that process less than $5,000 monthly.

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Payline

It has a reputation for taking on high risk clients, but only works with well-established businesses that sell CBD — so not a good choice for startups.

  • It sources high risk merchant accounts from over 20 banks
  • $20 monthly and 0.30% + $.20 per transaction.

Takeaway: Best for retailers with a strong sales history looking to add CBD products to their inventory.

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Durango Merchant Services

Durango’s high-risk accounts come with no annual fees, flexible contract terms and a dedicated account manager.

  • Works with established high-risk customers
  • Your business can also accept e-checks and direct deposits
  • Multicurrency accounts for international orders

Takeaway: Consider Durango if you like the idea of working closely with a sales rep.

EasyPayDirect

Offers a transaction rate of 2.5% plus $0.25 per transaction. But you have to sign a contract, and watch out for its flat $30 monthly fee and a $99 setup fee.

  • No monthly minimum volume requirement
  • Approval in seven to 14 business days
  • Both ingestible and topical products accepted

Takeaway: Best for companies that prioritize a low transaction rate.

Smb Global

Works with 15 international and domestic banks so you can sell products around the world. With a specialty in high-risk payment processing, it works to connect you with a merchant account that suits your CBD business.

  • Chargeback prevention suite that includes real-time analytics and reporting, plus a system to help with rebuttals
  • Focuses solely on high-risk businesses
  • Partners with Lendio to offer business loans

Takeaway: Consider this if your business processes more than $50,000 monthly.

How do I apply for a CBD payment processor?

The payment processors here let you sign up or apply by filling out a brief form online. Usually, you’ll need to provide the following info:

  • Name, email and phone number
  • Business name
  • Business website
  • Business launch date
  • Annual sales

It may also ask you to indicate other business software that you use.

How to compare CBD payment processors

To find the right CBD payment processor for your business, get multiple quotes to ensure you’re getting the lowest rates. Also consider:

  • Availability and cost of hardware. Browse credit card scanners and POS hardware to make sure the price and features align with your needs if you anticipate in-person sales.
  • Integrations with other small business software. Look for a payment processor that offers integration with the tools you already use.
  • Contract terms. Keep an eye on contract lengths and termination fees, opting for payment processors that let you pay monthly or annually wherever possible.
  • Transaction rates. CBD payment processors are notorious for sky-high transaction rates, so don’t sign up until you’ve compared rates from multiple providers.
  • Customer service. Be wary of payment processors that have limited customer service options. Its business hours should line up with your preferences.
  • Reputation. Browse entrepreneur and business forums online to glean insight about which CBD payment processors keep their promises.

Does PayPal accept CBD sales?

CBD sales are considered a “gray area” for PayPal, according to a phone conversation we had with a customer service representative on June 6, 2020. To determine whether you can use PayPal to process your CBD payments, reach out to its Acceptable Use team at aup@paypal.com to explain the details of your business.

When we used the PayPal live chat feature to ask about selling CBD-infused lotion specifically, the agent confirmed that it would be acceptable to use PayPal business to facilitate the transactions. If you think your business might be able to partner with PayPal, it may be worth inquiring since PayPal’s transaction rates start at 2.9%.

How can CBD payment processing benefit my business?

A CBD payment processor might help take your business to the next level by allowing you to:

    • Accept credit or debit card payments. Attract and retain new customers in person and online with credit card purchases.
    • Offer alternative payment options. Sell gift cards, partner with a buy-now-pay-later lender, and accept payments made via direct deposit.
    • Integrate with existing software. When you sign up with a payment processing provider, you should be able to link your account to any accounting, shipment, marketing or e-commerce platforms that you use.
    • Lean on its specialized experience. CBD payment providers that devote themselves to high-risk clients should have a strong track record of working through tricky legality issues involved in your business.

CBD vs. marijuana

Just because a payment processor works with CBD businesses doesn’t mean it’ll offer the same services to companies that sell marijuana products. To be considered legal under federal law, CBD products must contain less than 0.3% THC. Typically, the potency of marijuana products ranges from 0.3% to 4%.

If you live in a state where marijuana is legal and have a license to sell it, look for a payment processing provider that works specifically with cannabis products, rather than CBD. This could include:

  • Dama Financial
  • Evergreen Gateway
  • Hypur

Compare payment processors

Data indicated here is updated regularly
Name Product Monthly fees start at Processing fees start at Processing time High-risk merchants accepted?
Chase Merchant Services
None
2.6% + 10¢ per swiped credit card
Next day when you deposit into a Chase business checking account
No
Accept, process and deposit customer payments in your store, online or on-the-go.
Fattmerchant
$99/month
$0.08 + interchange per transaction
Next day for qualified businesses
No
Businesses that process more than $10,000 monthly can save with Fattmerchant's interchange+ pricing.
Square
None
2.9% + 10¢
Next day
No
Square is a one-stop shop with both e-commerce and in-person solutions.
Helcim
$20/month
1.92% + $0.08 per transaction
Two business days
No
Conveniently packaged into three service tiers for in-person and online sales.
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Compare up to 4 providers

Bottom line

With CBD making its way into the mainstream, you shouldn’t have to settle for a payment processor with exorbitant rates and sketchy contracts. Working with a provider that specializes in high-risk accounts can help you secure the best terms for your business.

As a CBD startup, part of growing your money requires having access to additional funds. Similar to CBD payment processors, you’ll need to compare lenders that cater to high-risk businesses.

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