Industry: Hemp Merchant Services

If you own or manage a company that sells hemp products like CBD oils and delta-8 THC gummies, you likely need a hemp or CBD merchant account from someone willing to work with high-risk industries. Unfortunately, you might find that many service providers don't want to provide payment processing for high-risk industries. Zenti offers solutions that can help you improve sales and security while controlling costs.

Why are hemp and CBD products "high-risk"?

Many payment processors consider hemp wholesalers and retailers "high-risk" because they worry about the legality of products. The 2018 Farm Bill made it legal for farmers to grow hemp as long as they got approval from their states. The law also says that companies can sell hemp-related products as long as they contain less than 0.3% delta-9 tetrahydrocannabinol, the chemical in cannabis that makes people feel "high."

Payment processors want to avoid risk when possible. From their perspective, companies working in the hemp industry need high-risk merchant accounts that often charge high fees. They might worry that they will provide CBD payment processing for a product that does not meet federal and state laws. Some also don't want to get involved with an industry so closely associated with the marijuana industry. After all, hemp and marijuana are different types of cannabis plants. The very idea unsettles risk-averse payment processing systems and online sales platforms.

Other factors that can make your hemp or CBD business seem like a high risk include:

Your personal credit.
Accepting recurring payments (such as letting customers create memberships that ensure monthly deliveries).
Getting a large number of chargebacks.
Accepting multiple currencies (including cryptocurrencies).
Prevalent fraud in the industry.

You can address some of these factors to lower your risk. Realistically, most will not want to process payments for any high-risk business. If they give you a high-risk merchant account, they will probably charge high monthly fees and excessive interest rates.

Lowering your business's risk

Some merchant account providers and payment processors will always consider your business a high risk because you sell hemp products. You can still take some steps to lower your company's risk.

Encourage in-person payments when possible to limit your number of chargebacks.
Require CVV codes when customers use credit cards to pay online.
Communicate with customers so they know when to expect orders.
Track your payment processing history to find opportunities for improvement.
Provide accurate, detailed descriptions of products so buyers will return fewer items.
Include product information on credit card bills, so customers remember what they bought from your store.
Improve your personal credit rating.
Pay your taxes and bills on time to avoid liens.
Develop and maintain a reputation as a reliable business.

Advantages of a merchant account for the hemp industry

Getting a merchant account with credit card processing services can introduce your business to several benefits that improve customer services, payment security, and branding. Some of the advantages you can look for include:

More payment options for customers

Opening a hemp merchant account can give you access to a gateway payment provider that accepts more payment options. Most of your customers will likely want to use credit cards to pay for purchases. A payment gateway lets you accept:

Credit cards
Debit cards
Mobile app payments
Contactless payments from mobile devices like smartphones and smartwatches

More secure payments

Debit and credit card processing should use point-to-point encryption to protect sensitive information from theft. A payment gateway goes one step further to ensure that customers have the funds needed to pay for their orders. Payment gateways make online shopping nearly as secure as in-person shopping. With Zenti, you get a payment gateway that works online and with your POS system.

Convenient payment processing tools

Merchant accounts can connect to convenient payment processing tools that make your job easier. For example, you can integrate with your eCommerce solution to manage your stock, payments, and revenues from one dashboard. That way, you can spend more time focused on improving and growing your brand instead of tinkering with unconnected apps.

Accepting debit card and credit card payments for hemp products

Ecommerce platforms play a critical role in the success of businesses that sell hemp products. Online cannabidiol (CBD) sales are expected to exceed $6.077 billion by 2026. The CBD industry relies on the internet, but retailers still struggle to find affordable debit card and credit card payment processing services.

If you already have an online store established through a platform like Shopify, you might encounter difficulties processing payments. Zenti's Shopify high-risk payment gateway integrates with the platform so you can accept online payments seamlessly.

You can also use the WooCommerce high-risk payment gateway and other integrations that simplify everything from tracking sales to accepting payments directly through a WordPress site.

How to choose the right hemp merchant services for your business

Several high-risk merchant account providers can help you process payments. How can you determine which one meets your needs best? Start by looking for features that will benefit your business.

Affordable fees and rates

High-risk merchant account providers charge more than companies that only work with low-risk businesses. As a business that works in the hemp industry, you can expect to pay higher fees and rates. That doesn't mean you have to pay extravagant prices that make it difficult for you to earn a profit.

Reach out to several merchant account providers so you can compare pricing options.

Fair, upfront pricing

As you explore pricing from hemp merchant account providers, you will find that some don't provide upfront pricing. You deserve to know how much each service and transaction will cost, so don't choose a provider that keeps that information secret.

You should also look for fair pricing. Does the account provider charge different prices depending on the type of credit card your customer uses? That's an unnecessary complication that will make managing your finances more difficult.

Zenti gives you upfront, fair prices, so you always know what charges to expect with every transaction.

Mobile payments

Plenty of small businesses have moved beyond brick-and-mortar stores. Now, they have online stores that can serve customers 24 hours a day. You might also sell your hemp products at events, such as farmers' markets and music festivals.

Choose a hemp merchant account provider that lets you accept mobile payments. That way, you can meet your customers where they are instead of waiting for them to find you.

Zenti can give you a free mobile payment reader that works with most internet-connected smartphones and tablets. Now, you can swipe credit cards, process the payment, and finalize transactions from anywhere with an internet connection.

Common questions from hemp business owners

Do major payment processors such as Stripe and PayPal work with hemp businesses?

Most of the popular payment processors do not support hemp and CBD sales. Stripe says that it restricts "any products with CBD or THC in them," including tinctures and oils that contain CBD. Stripe doesn't seem to distinguish between hemp products and cannabis products.

PayPal does not list CBD as a restricted item, but the company has been sued for locking the accounts and holding the money of businesses that sell CBD.

Square works as a CBD payment processor as long as you join the Square CBD Program. It's unclear whether Square will process payments for other hemp-derived products, such as those containing delta-8 and delta-9 THC.

Zenti provides flexible point-of-sale systems (POS systems) and online payment gateways that offer fast approval, chargeback management, and credit card processing for businesses that sell hemp products. You also get clear, upfront pricing for CBD credit card processing, payment gateways, and other processing solutions.

Can you sell hemp products on Etsy?

Etsy lets you sell hemp products as long as they do not contain more than 0.3% THC. For example, you can sell CBD oils with 0.2% THC.

Notice, however, that Etsy doesn't distinguish between different types of THC. While the federal government doesn't currently ban delta-8 THC, delta-10 THC, and similar chemical compounds, Etsy does not allow its vendors to sell products that contain more than 0.3% of those compounds.

The popular online store doesn't care that your CBD balm contains 0.5% delta-8 THC instead of delta-9 THC, which is a Schedule I drug. It forbids any form of THC that exceeds 0.3%.

How can you switch to a new hemp and CBD merchant account?

If you already have a merchant account with a company that doesn't fit your needs or charges excessive fees, you can switch to Zenti to enjoy a more flexible approach to high-risk merchant account services.

You will need to take some steps before you change account providers, though. Make sure you:

Don't have a contract that prevents you from switching providers.
Understand the potential penalties of breaking any existing contracts.
Ensure that any gift cards will work with your new system.
Compare fees and rates, so you know you're getting a better deal.
Can get a new payment processing system that meets your needs.

Zenti makes the switch as easy as possible by providing a free EMV terminal or mobile reader. You even get a free set-up that ensures you're ready to start accepting payments in-store and online.

Can you ship hemp products to customers?

You can ship some hemp products without concern. Federal law makes it legal to sell CBD oils, tinctures, and similar products as long as they contain less than 0.3% THC.

The issue becomes more complicated when you sell items that contain chemical compounds like delta-8 and delta-10 THC. The federal government lists cannabis and delta-9 THC as Schedule I drugs, so you can't mail them to customers. Delivery services exist in some cities, but you will need to check your local regulations to explore those options.

Since federal law specifically controls delta-9 THC, many businesses argue that they can sell products that contain slightly different chemical compounds. For example, you might sell delta-8 gummies that offer a relaxing high. Although legal at the federal level, some states have stepped in to ban other forms of THC. Interestingly, some states have legalized recreational cannabis but do not allow delta-8 sales.

Talk to a legal expert before you decide to ship THC products to customers. You might need to avoid sending products to some states. You might even decide that you do not want to ship certain products to anyone outside of your state. There is a good chance that your decision will change as the legal landscape evolves. When in doubt, get advice from an attorney with plenty of experience working with the hemp industry.

Get started with Zenti hemp merchant services

Hemp and CBD merchant processing doesn't have to cost a lot of money. Zenti helps CBD sellers and other businesses in the hemp industry process payments securely at affordable prices. Members get a tested system that reduces chargebacks, deposits money into accounts quickly, provides upfront pricing and integrates with the other tools your business needs to thrive.