|November 14th, 2017|
Being a hemp business owner has its own challenges which grow further when looking for merchant services. Yes, starting with CBD hemp oil merchant account is not something as easy as filling out an online form. Considered as ‘high risk,’ it is necessary to appear legitimate with this particular industry type.
Luckily, there are merchant account providers who work exclusively with high risk businesses. Here, in this blog, we will talk about some important elements related to CBD industry.
Knowledge about the complications specific to the products and services is greatly helpful to choose reliable, secure and genuine merchant services. But before focusing on the crucial aspects, it is important to let you know that difficulty in getting CBD merchant account has led to setting up of fake businesses and websites.
CBD Business Financial Aspects
There ain’t denying the fact that legal cannabis industry is doing exceptionally well. Going by the predictions, this industry will witness approximately $8 billion revenue in 2018. Besides figuring out the logistics, legal side and processes of the business, another issue that’s worth thinking is the processing of payments.
Not only loans to CBD merchants are refused but high rate is also charged by the merchants. However, the percentage of people willing to invest in the industry is increasing like anything. This has obviously helped startups with initial funding because incredible potential in the industry is foreseen.
Process payment methods, such as credit or debit card, need merchant account. If these options are not there, functioning is difficult for the business. Most of the entrepreneurs want to conduct the business not legally but transparently as well. Unfortunately, the cost to do this means compromising with profits and growth.
5 Essentials to Open a Merchant Account
1. Establish the business: Banks and other financial institutions provide accounts to established and successful companies. Reason, these organizations have strong financial standing to support their company’s health. Before attempting to obtain a CBD merchant account, it is required to own an an existing bank account.
2. Monthly volume: As known, high risk businesses face high fees for accounts. Not only this but they also deal with the unwillingness of merchant account companies and banks to avail the needed payment processing services. Amount of business done is one of the foremost components these constitutions take into consideration.
3. Minimize chargebacks: Chargebacks are the result of many reasons and cost high to businesses and merchant service providers. With strategies that aim to reduce the chargebacks, obtaining the account is easy. If you are involved in this business, make sure that the chargeback frequency rate should not be more than 3% of the transactions. You will be surprised to know that there tools to prevent frauds and chargebacks.
4. Strong processing history: The longer one is into processing payments, the more are the possibilities to get the account. Generally, it is suggested that CBD merchants possess a processing history of minimum six months. Also, they should include their products and their prices on the website. A complete website supports the processing history and helps to get the account.
5. Choose the right account provider: As already discussed, the ratio of merchant service providers is limited for CBD businesses. While some of them have high fees or offer improper support, others lack the needed transparency. Hence, you have to be careful and choosy to settle for the best provider. The business must be able to process ACH, credit card and other payments. Also, it must have a dependable payment gateway that integrates with its current site and online assets. Last but not the least, management systems for chargebacks and fraud are also the success parameters.
So, with this we have covered some very phenomenal aspects of CBD merchant accounts. Keep these things in mind and find the best provider who can meet your needs and provide the ongoing assistance to expand your business.