The CBD payment processing landscape in the United States is evolving very fast, and the recent political and regulatory signals are actually creating a very strong momentum for this industry. With the increase in public usage and government-level discussions around easing the restrictions, CBD is definitely moving from a restricted niche. It looks like in future CBD may move from the restricted niche to mainstream high-growth category.
Recent reports suggest that a significant portion of adults are already using CBD products, which highlights a very strong and, sustainable consumer demand. However, despite of all these positive momentums that we have discussed, CBD businesses, they still face major challenges when it comes to processing payments and accepting credit card transactions.
Most traditional payment service providers, they classify all kind of CBD businesses as high risk, and this is primarily because of the regulatory uncertainty, the risk of chargebacks, and the comprehensive compliance requirements. This simply means that many merchants in this industry, they still experience sudden account shutdown, heavy rolling reserve, and sometimes even outright rejection when they apply for a standard merchant account.
What CBD merchants must do right now is that they should structure their application and their business profile so that payment processors cannot say no to them. To operate successfully, CBD businesses must work with a payment service provider that truly understand the U.S. hemp and CBD compliance framework. Along with that, the payment service provider should also implement comprehensive chargeback management strategies that helps businesses in reducing the risk of disputes from customers.
It is also important for the acquiring partner to have multi-bank routing with fallback solutions. This helps in increasing the transaction success ratio. The underwriters should be capable of performing high-risk underwriting for merchants from difficult industries. This is all these are especially important as the industry is scaling very fast, and this means that it will attract more scrutiny from regulators and financial institutions in the future.
QuadraPay proudly connects CBD businesses with specialized payment processing companies in the U.S., U.K., European Union, and Canada. Our partner providers are comfortable with various high-risk industries, including CBD, vape, and credit repair. Whether you are selling services online or you run a recurring subscription or you want to expand globally, our solutions may potentially help you.
If you are operating a CBD or a hemp business or you run a Paraphernalia headshop business and are struggling to get a payment processing solution approval, then now it is the time for you to get a future-proof solution through QuadraPay. Apply Now.