ALLEGIANCE NEWS

Hemp and CBD Payment Processing Solutions

For businesses riding the waves of selling CBD products, smooth sailing means having a hemp and CBD Payment Processing solution tailored to their specific needs.

Your payment processor is like the trusted captain of your ship, navigating through the waters of transactions and financial regulations to ensure your cargo—aka sales—reaches its destination without a hitch. This is crucial for maintaining not only a steady cash flow but also a trajectory of growth.

That’s what Allegiance Service does best.

We’re here to get you sailing smooth with stable CBD payment processing.

Overcoming Difficulties and Securing CBD Payment Processing

There are a variety of business models and marketplaces selling hemp and CBD products, and processing is not always a one-size-fits-all. This is where personalized solutions become important to address various needs and regulations pertaining to your business. 

CBD businesses face unique challenges when it comes to payment processing. 

These challenges include:

Limited Options

The options for payment processing are limited for CBD businesses due to several reasons:

  • Regulatory complexity surrounding the CBD industry
  • Bank’s reluctance to engage with businesses they perceive as high-risk
  • The legal gray area around CBD
  • Risks associated with the psychoactive cannabinoid products
  • Banks and processors tightening their policies and not accepting any new CBD businesses

These factors make it difficult for CBD businesses to find payment processors willing to work with them.

Regulatory Compliance

Complying with regulations is crucial for CBD businesses to avoid penalties and maintain their licenses. To stay compliant, CBD merchants should:

  • Follow federal and state regulations, such as the Agriculture Improvement Act of 2018
  • Obtain and keep up with necessary licenses and permits
  • Stay informed about any changes in laws and regulations
  • Have clear disclaimers and updated privacy and return policies on their website
  • Make all product lab results accessible
  • Have an age gate verification and never sell to persons under the age of 21
  • Keep all marketing copy claim-free in accordance with FDA regulations

Failing to meet these essential requirements can limit the choice of payment processors available and breaking compliance rules puts you at risk of having your current payment processing shut down.

High-Risk Status

As silly as it may seem, CBD, a natural supplement from hemp, is considered high-risk, even though it’s much safer than many products you can buy off a shelf at a store. 

Financial institutions classify it as high risk due to:

  • Varying state laws / legal gray areas
  • Changing policies
  • Extensive compliance and regulatory requirements
  • High chances of chargebacks

This high-risk classification leads to higher fees for transactions, stricter contract terms, and the possibility of sudden account closures. As a result, CBD businesses struggle to find reliable payment processing services.

 

As your payment processor, we will guide you through the process to bring your website and business up to speed with current industry policies and regulations and provide you with secure payment processing.

 

Let’s Set You Up For Success!

Call Allegiance Service

800-301-5538 

 

As a CBD or cannabinoid product seller, you need to have thorough and up to date third-party lab testing documentation available for all your products. 

You also need to have disclaimers on your website stating that the products are not intended to diagnose, treat, cure or prevent any disease and you are not giving out medical advice. 

Overcoming Key Hurdles: Banks, Gateways, and CBD Payments

When it comes to the CBD industry, banks hesitant to work with CBD businesses is an understatement. Entrepreneurs often find themselves in a catch-22 situation: needing financial services to grow, yet facing reluctance from these very institutions due to the industry’s high-risk profile. The challenge extends to finding reliable payment gateway providers that are willing to support CBD transactions without exorbitant fees or unreasonable restrictions.

Here are some things you need to consider when applying for payment processing:

Show Strong Financial Management – This shows banks and processors that you’re a responsible business and won’t put your financial service provider at elevated risk. 

Show Transparency in Business Practices – Be transparent about your product and services, don’t make claims, and make sure policies and regulations, lab results, and disclaimers on your website are up to date.

Specialized Payment Gateways – Utilize gateways that specialize in high-risk industries that are compatible with the unique needs of the CBD market.

CBD-Friendly Banking – Make sure your business bank account is CBD-friendly, and you are operating compliantly. 

Document Compliance Efforts – Keep up to date records such as third-party lab results for compliance with state and federal regulations. Showing that you’re a trustworthy business. 

CBD Payment Processing Compliance Requirements

Navigating Regulatory Demands in CBD Payment Processing

Staying ahead of regulatory changes is crucial for CBD businesses, especially when it comes to payment processing. The federal Agriculture Improvement Act of 2018, also known as the Farm Bill, was a significant milestone that legalized hemp-derived CBD products containing less than 0.3% THC.

However, this doesn’t mean the regulatory landscape is static; on the contrary, it continues to evolve at both federal and state levels.

Why Regulatory Compliance Matters:

  • Avoid Costly Penalties: Failing to comply with regulations can result in hefty fines or even the shutdown of your business.
  • Maintain Customer Trust: Consumers are more likely to trust and stay loyal to brands that adhere to legal standards.
  • Ensure Access to Payment Processing: Compliance is often a prerequisite for securing payment processing services.

Essential Steps for Compliance:

1. Stay Informed

  • Monitor updates from the Food and Drug Administration (FDA) as they evaluate how to regulate CBD.
  • Keep an eye on state regulations, which may have specific requirements or bans on certain types of CBD products.

2. Obtain Licenses/Permits

  • Secure all necessary local, state, and federal licenses and permits for manufacturing, distributing, and selling CBD products.

3. Product Testing

  • Regularly test products through accredited labs to ensure they meet quality and safety standards dictated by law.

4. Labeling Requirements

  • Adhere strictly to labeling guidelines, providing accurate information about the product’s content and health claims.

5. Banking and Processing Relationships

  • Choose banks that are willing to work with CBD businesses and understand their unique needs regarding regulatory compliance.

By navigating these regulatory demands with diligence, CBD merchants can establish a stable foundation for their payment processing needs while fostering a trustworthy relationship with consumers.

Why Choose Allegiance Service for CBD Payment Processing?

Stepping into the world of CBD business means navigating the complex landscape of payment processing. Having a reliable payment processor like Allegiance Service can be a game-changer for your business. 

We are not just any service provider; Allegiance Service specializes in merchant services for Hemp, CBD, and Cannabis businesses, with years of experience supporting these highly regulated industries amongst changing laws.

A trusted partner for your CBD payment processing needs, we prioritize:

Tailored Solutions

Every CBD business is unique, and Allegiance Service recognizes this by offering personalized payment processing solutions that cater specifically to high-risk industry requirements.

Diverse Payment Options

Whether it’s credit/debit card transactions, Apple Pay, Google Pay, Buy-Now-Pay-Later, mobile payments, cryptocurrency, and integrated Loyalty and Rewards programs, we believe in diversity and redundancy so you can cater to your customer’s payment preferences.

Five-Star Customer Support

What our clients love most about choosing Allegiance Service is how easy it is to get support. No waiting on hold or chatting with a robot online; pick up the phone and get on with one of our knowledgeable support team members right away.

CBD Payment Processing Questions

Can a New CBD Business Get Payment Processing?

Yes, new CBD businesses can qualify for payment processing services, and it may require providing some more information for underwriting, such as the business owner’s personal financial information and providing a business plan and all necessary compliance documentation. Sometimes new businesses have to go through additional steps when setting up new merchant account, but you can proceed with confidence, Allegiance Service will help you get approved.

My CBD Business Payment Processing has Been Shut Down, Can Allegiance Service Help?

Yes, we have many clients who have gone through processing disruptions from payment companies that are notorious for picking on CBD, although their policies allow it. You’ve come to the right place, we know just how to help you get back up and running with secure payment processing solutions and a clear path forward.

Can You Process for Hemp Delta-8 THC Products?

Yes, the alternative cannabinoid market is booming, and we have secure processing options to help you obtain payment processing for Delta-8, Delta-9, HHC, THCA, and other alternative hemp derived cannabinoid products.

What Challenges Do CBD businesses Face in Payment Processing

CBD businesses face challenges such as limited options, higher scrutiny from financial institutions due to the nature of selling highly regulated products, extra curricular compliance policies, and being categorized as high-risk by banks and payment processors. These challenges equate to limited options for payment processing services.

What Should CBD Businesses Consider When Looking for a Payment Processor?

CBD businesses should look for a payment processor with expertise in handling high-risk merchant accounts for CBD, previous experience working with CBD  businesses, a positive reputation, transparent pricing structures, competitive pricing, and excellent prompt service. It’s important to find a processor that understands the industry nuances and is willing to assist CBD entrepreneurs every step of the way through the process, from application, underwriting, and approval until you are processing.

Choose reliability, choose security, choose compliance.

Choose Allegiance Service.

Reliable and economical merchant services tailored for high-risk industries like yours.

Committed to your success!

Phone

(800) 301-5538

Email

support@allegianceservice.com

Scheduled

Book a 30-minute call here