Accept CBD payments with: Square
- 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.
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.
These payment processors have a track record of working with companies that sell CBD products.
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.
Takeaway: Best for startups and businesses that process less than $5,000 monthly.
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.
Takeaway: Best for retailers with a strong sales history looking to add CBD products to their inventory.
Durango's high-risk accounts come with no annual fees, flexible contract terms and a dedicated account manager.
Takeaway: Consider Durango if you like the idea of working closely with a sales rep.
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.
Takeaway: Best for companies that prioritize a low transaction rate.
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.
Takeaway: Consider this if your business processes more than $50,000 monthly.
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:
It may also ask you to indicate other business software that you use.
To find the right CBD payment processor for your business, get multiple quotes to ensure you're getting the lowest rates. Also consider:
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 firstname.lastname@example.org 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%.
A CBD payment processor might help take your business to the next level by allowing you to:
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:
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.
What documentation do I need to sign up for a CBD payment processor account?
You’ll need a copy of your driver’s license or passport and a void business check or bank reference letter. Some business types may also need to show proof of business, which could include your DBA registration, business license or articles of incorporation.If you’re a wholesale CBD distributor, you may need to show lab results proving that the THC level of your products is less than 0.3%. Check with your payment processor to confirm necessary documentation.
Are there any fulfillment services that work with CBD businesses?
Yes, many fulfillment services do work with CBD businesses, though some do not. Reach out to whichever fulfilment service you’re considering to inquire directly.
What's an acceptable chargeback rate for high-risk merchants?
The ideal chargeback ratio is under 3%, according to PaymentCloud.
Is PaymentCloud good for CBD businesses?
It depends. PaymentCloud only works with merchants that sell topical products like lotions, creams, makeups or bath products. If you sell tinctures, oils or any ingestibles, PaymentCloud isn’t for you.
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