How to find the best CBD payment program for you?
Boy the last few years have been very difficult to find a credit card processing company that understood exactly what CBD is and why it is a legal product. What’s the Federal Law, the State Law? While many processing companies have shut down CBD merchants and Shopify, PayPal, Stripe and others decided they didn’t want the headache while so much was in limbo.

There were a few companies that came into the market place with not the best of intentions. Aggregators, PayFacs, Offshore accounts and others. Some were charging upfront fees just to fill out an application while others decided to charge high reserves and holdback merchant’s deposits from 3 days to 2 weeks and sometimes even longer.

Is CBD/Hemp Oil a high risk merchant type?
Based on information and records from the last 20 months from a Major US processor and a Major US bank, CBD merchants are some of the best merchants in the ecommerce space and even better in B2B. The major US Bank states that they consider CBD low risk and are looking to bring on farmers, hemp processors as well as other categories in the space.

Credit Card Processors take the path of least resistance. If they think it is high risk business then they will automatically charge a reserve and possibly even a delay in funding. If you find yourself in this position where your processor is requiring a reserve, you need to know what the rules are. First, reserves must be placed in a separate escrow type account on your behalf and the processor is required to let you know what bank the reserves are being held in. Second, if the processor is delaying funding, those funds are also required to be able to be mapped back to their source and held in individual accounts in each merchants name and theses accounts must be reconciled monthly. Unfortunately, some of the offshore processors think that the rules don’t apply to them and that they have the right to use merchants reserve or arrears for their own personal use. Before signing, read the contract, ask questions regarding reserves and anything else that you think is important. Understand this, offshore processing means many more declines, sometimes as much as much as 50%, plus reserves and holdbacks. It can get to the point that the processor may actually be making more money monthly than you are.

If you must go offshore check out the Bank and make sure with any contract you sign that the banks name is included in the contract. If you don’t see the bank name on the contract, you will probably want to find a new provider.

Processing Company and Agent understands the CBD business.
Can the person representing the processor give you direct answers on funding times, reserves, holdbacks, types of products that the processor is willing to accept? Find out who else is processing with the company and the agent. Do they have reference letters? How up to date are they on the political landscape? Are they members of any Hemp Associations?

Other essential products and services offered?
Can the processor or agent help to make sure that you are PCI compliant and that all of your systems pass Quarterly scans for PCI-DSS? If you need a chargeback management service, can the processor help find the one that will service your needs? Do you get your own descriptor that will appear on your customer’s statement? Will the processor make sure that your website contains all of the information to help you prevent chargebacks?

Finding the best solution for you?
Once you think you have find the right solution for you, do your research, check the BBB, and check the blogs and complaint boards. Ask questions about the contract and the terms and conditions. Be careful of abusive early termination clauses.
The owner of BMJ Group has 20 years’ experience in the hard to place processing space. From Travel, supplements, gaming, CBD and Marijuana Dispensaries we have solutions for a variety of high risk businesses.

If you have questions regarding a contract, contact your attorney or forward off to my office. Send to info@BMJgroupinc.com. We do not dispense legal advice, but can point out pitfalls in a processing contract.

If you would like to talk with a live person, call us at 866-265-4771

This content is provided as a membership benefit to our valuable business level members. Due to several factors including the variances in state hemp laws and the differences in interpretation of federal law, NHA makes no warrants of the legality, efficacy or safety of any product, service or statement made by any third party.

We encourage all members and the general public to do their own due diligence on any business or product, and understanding their state’s and federal laws, before choosing to purchase any product or contracting for any service.