Grandview Research predicts that the CBD industry in the US will reach 3.5 billion by the end of this year, up from 2.8 billion in 2020¹. CBD continues to skyrocket in popularity with humans and pets and is becoming a mainstream product that many consumers are familiar with. It is no longer a fringe product, and as research continues, more and more benefits are being discovered, which only lends to its rising popularity. As popularity rises, consumers expect the same convenient payment options they have for purchasing any other product.
Although it is legal to sell CBD in 42 states, merchant card processors continue to consider CBD a high-risk business, making it hard for retailers to find a reliable processor that will allow them to accept major credit and debit cards. For a high-growth industry, this is unfortunate. As both e-commerce and brick-and-mortar CBD stores scramble to find a payment processor that will accept them, some high-risk processors view this as an opportunity to take advantage of the situation. As you’re searching for a dependable merchant processor, consider the following tips to help ensure you find one that will treat your business fairly. A great merchant processing solution for the CBD industry should:
- Allow for the sales of CBD products. While this may sound obvious, many CBD startups consider using popular options like PayPal or Stripe. However, neither of these options allows for the sales of regulated products, including CBD. Don’t try to skirt the subject. Communicate clearly with any payment processor you consider using that you will be selling products that contain CBD. Otherwise, if revealed at a later time, they may hold funds, or worse, freeze or shut down your account without notice, leaving you unable to process payments. CBD is a relatively new industry that is highly regulated and prone to payment card fraud and chargebacks. Only a few CBD payment processing services are willing to take on these risks. Find a company that boasts extensive experience in aiding businesses operating within a high-risk sector.
- Offer easy integrations. Integrations with your website, accounting software, inventory management system, or other software can substantially benefit your business. Integrations provide a way to streamline your operations, increasing efficiency and profit margins. If you plan to sell CBD products through an e-commerce site, it’s important to know the available integration options for your website builder(CMS). One of the most popular ways to integrate your payment processor with your website is using Authorize.net. Some CBD payment processors offer API integrations as another method to integrate your payment processor with your e-commerce site securely. You may incur costs for integrations, whether it’s paying a developer to do the work or paying fees to use Authorize.net or something similar. Weigh your options, run the numbers, and ensure you make an informed decision to best take advantage of the power that integrations can provide your business.
- POS availability. Point-of-sale (POS) systems are the terminals that execute customer payments. While what first comes to mind is a retail checkout scenario, there are also virtual terminals. It’s crucial to have a dependable POS solution as they help save you time and money, resulting in increased profitability. Some POS systems are merchant agnostic, meaning they are designed to integrate with any payment processor. Many POS options are not merchant agnostic. Selecting a payment process that is compatible with as many quality POS options is crucial. A great Point-of-sale solution will provide accurate reporting that integrates with accounting software, helping you to manage both online and offline transactions. Analyzing point-of-sale metrics enables you to increase store profitability and customer loyalty while efficiently handling inventory management. Look for a processor that lets you add business intelligence and ease of access to your sales portal.
- Low fees. This is usually the first thing that business owner’s ask about when considering making a switch to a new merchant processing solution. It’s also what most merchant account sales reps lead with, “we’ve got great rates” or “we can beat your current rates.” While this may be true, what you really need is a payment processing solution that you can depend on for the long haul. Unfortunately, many processors will sell you on great introductory rates, only to increase them on you down the road. Other processors have hidden fees, and some may have both. While there are many shades of gray when it comes to fees, there are some things to look for that will help you make a good choice.
- Choose a merchant processor that offers Interchange Plus pricing. While flat rate pricing may sound attractive on the surface, it is not as transparent, and this pricing model is where hidden fees abound.
- Find a processor that does not charge a cancellation fee. Being held hostage by a contract or an outrageous cancellation fee is a tell-tale sign that a processor is not a good choice. If you can easily change to another payment processor, you can expect fair rates, fees, and quality support, as this is what the merchant processor relies upon to retain your account.
- Ask for a fee schedule that outlines any and all fees that can be charged, including what triggers the fee to be charged to a merchant. Some fees are unavoidable, such as annual PCI compliance fees. While some flat-rate priced processors will tell you that they include this in their rates, don’t be fooled as you’re paying for it somewhere else.
- Not lock you into a contract. Many merchant processors will attempt to lock you into a contract. A good processor will not as they rely on providing an overall great experience as the reason you will stick with them. Look to partner with companies that offer transparent fees, no contracts, no cancellation fees, and locked-in service rates.
- Customer support. From PCI compliance to the handling of chargebacks, not all merchant processors are the same. Like any service, choosing a provider that offers quality customer support is essential. If you’re experiencing an issue, you need a responsive team that can help provide a resolution quickly. Ensure that customer service and technical support are available 24/7 or at least during your businesses’ hours of operation. Before you choose a payment gateway, ask if they provide fraud protection, and be sure to check out reviews to see what others are saying about the merchant services provider.
Knowing what to look for is the first step in choosing a dependable merchant processor specializing in meeting the needs of the CBD industry. Unity Payments is an example of a processor that provides transparent rates, powerful reporting, and simple API integrations. They offer advantages such as no contracts, no cancellation fees, locked-in service rates, 24/7 tech support, loss prevention specialists, and the ability to accept all major cards and ACH payments. Unity Payments is backed by Nuvo Company, an established leader in the merchant processing industry with over 35 years of experience serving various businesses, enabling Unity Payments to absorb a higher amount of risk.
If affiliation with the CBD industry has been preventing you from securing credit card processing with the features and reliability desired, or for a free audit to determine your potential savings, call Unity Payments at (321) 972-9838 or sign-up online.
Source: ¹ Grandview Research – Cannabidiol Market Size, Share & Trends Analysis Report