What Type Of Reserves Come With CBD Merchant Services
If you are in the CBD industry, then you must be aware that getting a CBD merchant services account in the United States of America or anywhere in the world is extremely difficult. Unfortunately, CBD merchants have to agree to higher transaction charges and many other conditions. Let’s discuss one situation that may be specific to high-risk merchants. Most of the low-risk merchants would probably not even understand what this term is.
Yes, we are talking about the Reserve account. Payment processing partners will probably ask you to sign a separate agreement that will help the merchant acquirer create a reserve account. This additional agreement is an addendum to the merchant processing agreement. Most of the times, the CBD Processing Reserve Account addendum will give merchants three options.
3 Modes Of Reserve With USA Based CBD Merchant Services Solutions
- Fixed Reserve. The first option is to collect a specific amount in advance from the merchant. Merchants can make the reserve payment by using a certified check. The merchant must be aware that the funds get locked for at least 180 days to sometimes 270 days from the time of closure or termination of the account. Based upon the merchants monthly processing volume, and the processor’s risk appetite, the reserve amount/percentage can vary.
- Rolling Reserve. In this mode, the CBD merchant account processor will deduct a specific percentage from each sale. This amount comes back to the merchant after 180 days to 270 days from the date of the transaction.
- Blended Reserve. The third option is the combination of the first and the second mode. If the profile of the merchant is extremely risk-oriented and the processor is not interested in taking even the slightest of risk, then the processing company may ask for a rolling reserve as well as a fixed reserve.
Please note that the amount available in your reserve account can be used by the processor anytime to issue refunds and maintain your account in the proper credit risk ratio. This amount can also be used by the PSP/IPSP to pay for any applicable penalties implemented by card schemes or govt agencies.
So keep in mind that even after paying the reserve amount and agreeing to rolling reserve, you must monitor your daily transaction and ensure meagre chargeback ration and negligible fraud transaction ratio.
We recommend Chargeback Alerts to reduce CB ratio.
We also recommend Fraud Filtering Services for High-risk CBD merchants.
If you are CBD Merchant and you don’t have a CBD merchant processing account, then you can’t think of gaining and national or international recognition in the industry. You need to get a merchant account for your CBD business, and that is why you need to find a payment processing partner that is comfortable in evaluating your application and also help you start processing. Quadrapay works with multiple CBD payment processing companies across the world. At this point, we have a solution for merchants who sell CBD and hemp products. However, merchants must realise that these solutions do not come easy. The process involves rigorous underwriting, and the merchant must comply with various terms and condition. To get more information about how you can get a merchant account, send us an email on [email protected], or you can also fill the merchant account application form available on the contact us page. We urge you to use your business email address while making the application. Unfortunately, because of a high number of applications, we are unable to respond to merchants that apply with free email addresses. We believe that professional organisations always use a business email address.