CBD Hemp Oil Merchant Accounts — What You Need to Know?

Being a hemp business owner comes with unique challenges—especially when it comes to finding reliable merchant services. Opening a CBD hemp oil merchant account is far from simple. Due to the nature of the industry, CBD businesses are often labeled as high-risk business, making it essential to appear transparent, compliant, and legitimate from the start.

Thankfully, several merchant account providers specialize in working with high-risk businesses, including those in the CBD sector. In this blog, we’ll explore critical considerations and updated insights for obtaining and managing a CBD merchant account.

Understanding the Complexities of CBD Merchant Services —

Having a solid understanding of the challenges specific to CBD products can help you choose a secure, reputable, and compliant merchant service provider. But before diving into the steps involved, it’s important to highlight a major issue: the difficulty in obtaining CBD merchant accounts has historically driven some entrepreneurs to set up non-compliant or fraudulent websites. This is not only risky but can also jeopardize long-term business success.

The Financial Landscape of the CBD Industry —

There’s no denying the impressive growth of the legal cannabis and CBD market. Back in 2018, analysts projected that the U.S. CBD industry alone would surpass $8 billion in revenue—a prediction that proved fairly accurate given the booming market in subsequent years.

Despite this growth, access to traditional banking services, loans, and payment processing has remained a challenge due to ongoing regulatory scrutiny, especially under federal law (even though hemp-derived CBD was legalized through the 2018 Farm Bill).

Most major banks and credit card networks have either restricted or limited their services to CBD businesses. As a result, entrepreneurs often face higher fees, stringent compliance requirements, and fewer provider options.

However, investor confidence and the entrepreneurial interest in the industry have grown rapidly—fueling innovation and opening more doors for compliant businesses with proper documentation and practices.

Why a Merchant Account Is Essential —

To accept credit card, debit card, and ACH payments, a merchant account is necessary. Without it, operating an online CBD store or expanding beyond cash-only sales becomes nearly impossible. While many CBD business owners aim to remain fully legal and transparent, the cost of doing so—such as regulatory compliance and high-risk processing fees—can eat into profits if not managed wisely.

5 Essentials for Opening a CBD Merchant Account —

Here are the five key factors to consider when applying for a merchant account for your CBD business:

1. Establish Your Business Legally and Financially:

Before applying for a merchant account, ensure your business is fully registered, licensed, and compliant with both state and federal laws. You should also maintain a business bank account and have the necessary corporate documentation, such as:

• Articles of Incorporation

• Tax ID (EIN)

• Business license

• Product certificates (e.g., COAs for CBD content)

Providers prefer working with established companies that demonstrate financial stability and operational transparency.

2. Show Predictable Monthly Volume:

High-risk merchant service providers assess the average monthly transaction volume and ticket size. If your business is new, be prepared to project realistic volume and provide any available financials. If you already have sales history, offer:

• Bank statements (last 3–6 months)

• Previous processing statements (if available)

• Inventory and pricing information

This helps underwriters evaluate risk and create a tailored rate structure.

3. Control Chargebacks and Fraud:

Chargebacks are a red flag in high-risk industries. Aim to keep your chargeback rate below 1%, and preferably under 0.5%. To reduce chargebacks:

• Use clear product labeling and refund policies

• Display terms and conditions prominently

• Offer responsive customer support

• Use fraud prevention tools (e.g., Address Verification, 3D Secure)

Investing in chargeback management platforms or alerts (like Verifi or Ethoca) can significantly help retain your account long-term.

4. Demonstrate Processing History and Online Presence:

Merchant providers often favor businesses with a stable payment history, ideally over a period of six months or more. Even for startups, having a well-developed website that outlines:

• Product categories and pricing

• Lab test results or COAs

• Shipping and return policies

• Legal disclaimers

can increase your approval chances. Ensure your website is SSL-secured, user-friendly, and compliant with FDA labeling guidelines.

5. Choose the Right Merchant Account Provider:

Not all merchant service providers are equal—especially in the CBD space. Look for providers with:

• Specialized experience in high-risk and CBD accounts

• Transparent fee structures (avoid providers with hidden fees)

• Integrated payment gateway compatibility (e.g., NMI, Authorize.Net)

• Options for ACH/eCheck payments, recurring billing, and mobile payments

• Built-in compliance tools and chargeback protection

Partnering with a provider that offers ongoing support, compliance updates, and scalable services can help you focus more on growth and less on payment disruptions.

Additional Tips for CBD Merchant Success:

• Stay Current with Regulations: CBD laws and policies shift frequently—especially at the federal level. Subscribe to industry newsletters and consult legal counsel.

• Work With Transparent Suppliers: Ensure all your products are derived from legal hemp sources and tested by certified labs.

• Educate Your Customers: Adding FAQ sections, product education, and certifications builds trust and minimizes refund-related issues.

Final Thoughts —

The CBD industry presents incredible opportunities, but also complex challenges—especially when it comes to payment processing. Opening a CBD merchant account requires preparation, transparency, and choosing the right partner.

By keeping the above essentials in mind and working with experienced providers, your business can gain access to the tools it needs to grow legally, securely, and efficiently.

Take the time to vet merchant service providers carefully—and always prioritize compliance, customer trust, and long-term scalability.