Need A CBD Merchant Account? High Risk Payment Processing Explained

The largest barrier to entry in the CBD marketplace very well may be obtaining a CBD merchant account.


June 7, 2023

CBD online retail product in a lotion container

The largest barrier to entry in the CBD marketplace very well may be obtaining a CBD merchant account.

Selling CBD products online can be a pretty profitable business endeavor since the total U.S. CBD sales are estimated to reach $1.8 billion by 2022. You probably already ran the numbers, but getting your slice of the cannabidiol profits is easier said than done.

Setting up a CBD merchant account and getting a high-risk payment processing system in place can be pretty challenging when starting out. It is critical for the success of your CBD online business to do your due diligence when it comes to selling CBD online. Because if you can’t take payments, you can’t take orders.

And trust that you won’t be the first person having issues setting up a CBD merchant account and payment processing system. It is probably the most difficult aspect of the whole online business setup.

Wait, isn’t CBD legal in the United States?

Since the signing of the 2018 Farm Bill, hemp was reclassified and taken off the Department of Justice and Drug Enforcement Agency’s Controlled Substance Schedules. No longer is hemp paired alongside marijuana as an illegal drug.

Hemp-derived products like those of the CBD variety have less than 0.3 percent THC, the plant’s psychoactive property. Even though the stigma is less than ever before, CBD products are still guilty by association when it comes to selling products for money, especially online.

This is what makes CBD high risk in the eyes of mainstream financial institutions and popularly used payment processors like PayPal. You may have encountered having your PayPal CBD business account temporarily blocked from taking payments. Not a fun email.

Currently, CBD products are classified as high-risk. Thus resulting in sellers having to jump through a number of hoops to get a payment processor to play ball.

And the road toward CBD merchant account and payment processing system approval is different depending on the type of products you’re selling.

Cannabidiol comes in multiple forms like lotions, tinctures, oil, edible products, and the list goes on. If you’re selling a lotion product, your road to payment processor approval is potentially shorter than that of a CBD business owner selling edibles.

CBD Merchant Account - Products

Is it legal to sell CBD? Absolutely. But finding a payment processor that is reputable and able to handle high-risk transactions without fail will make or break your business.

Quick note on high-risk payment processing for your online CBD business

Regardless of being legal, online CBD sellers are categorized as high-risk until the Food and Drug Association (FDA) sorts out the regulatory framework for the entire industry. Until then, you’ll need to be extra prepared and ready to put in the legwork to get your CBD store payment ready.

What can you do?

Find a platform that can set up a CBD merchant account and connect you with a payment gateway or two (more on that later) that allows you to process high-risk payments as if you were a low-risk business.

The variety of payment gateways available to you via (shameless plug) does depend on the country you operate your business in, as well as the currencies you accept on orders. However, with, we can digitally integrate with a wide range of very popular payment technologies. More on that below. has direct access to high-risk merchant account providers for the CBD industry. Learn more about our powerful billing and analytics platform and why is the leading ecommerce platform for CBD merchants.

The anatomy of online CBD payments

You’re probably wondering, “High risk, payment gateways, payment processors, what does all this mean?” It is actually not all that scary once you have a bit of understanding behind the anatomy of CBD payments.

It is slightly different than the traditional payment processing flow. The following are some must-know basics.

  • Payment Gateways: A payment gateway is a very necessary part of processing payments for your CBD business. It is how the payment data is securely transmitted to the payment processor to move the order/payment transaction forward. Payment gateways are also used for card-not-present transactions online, like using Square, PayPal, or Stripe.
  • Payment Processor: The payment processor is the entity that executes the transaction. It essentially transmits the data for the payment between you and your bank and the customer and his or her bank. The payment processor is the forward-facing part of the equation. If you have a brick-and-mortar store, the payment processor logo is on your point of sale (POS) hardware.
  • Merchant ID (MID): A MID is a unique number that makes transactions possible, especially when it comes to CBD sales. This unique identification code is given to you by your payment processor and is needed for transaction reconciliation. It is what identifies you as the seller to your payment processor and customers’ financial institutions.
  • Online Business Software Platform: Tying everything together is a software platform. This is a very important aspect to any business owner considering selling CBD products online. A software platform will serve as the facilitator of all transactions. A reputable and powerful software platform will also provide features like order management, fulfillment, analytics, and billing.

How to choose a payment gateway for your CBD business

There are a lot of hoops to jump through when setting up a payment gateway for your CBD online business, but it is certainly worth the time investment.

The CBD industry is exploding, and building your brand and selling products now will set you up as an authority in this lucrative space.

The industry boom has left a lot of sellers like you scrambling to find a payment processor. However, not all CBD merchant account providers are created equal. There are four key must-know things you need to have in place before opening a CBD merchant account.

1. High-risk payment processing is a must

Before choosing a payment processor for your CBD business, you need to ensure they can handle high-risk transactions. Since the taboo of CBD still lingers, only certain payment processors will be willing to take the risk associated with these types of transactions. Why? Payment fraud and chargebacks.

You want to find a payment processor that is reputable and has an exceptional track record dealing with high-risk industries. These industries include online dating, adult products, online gaming, vape, cryptocurrency, and others.

The keyword here is “high-risk” and it needs to be part of the conversation.

2. Integration of payment processor needs to be simple

One major problem CBD sellers have is integration. For instance, if you sell products via Shopify, you may have some problems integrating a payment processor, since it has to be an approved third-party payment processor per their terms of service.

So many sellers have this issue, and if you pick a CBD payment processor that you can’t integrate to your current ecommerce site, you may be rebuilding your website and store on a new platform. This can be costly in both money and time.

Don’t let this happen to you. When talking to a payment processor, ask if they can easily integrate into your current platform and store. If not, it may be best to keep moving. A lot of payment processors use API integration, and this has benefits like the ability to monitor everything from a business owners perspective, as well as a customer point of view.

Want to use a combination of Shopify and Square for your CBD ecommerce store? can pair these two very popular platforms with ease. Talk to us to learn more.

3. How reasonable are the processing fees?

This is a very important question to ask if you want to be successful in the CBD space. The truth is, there are a lot of payment processors that take advantage of the “high risk” nature of the industry by charging high processing fees per transaction. Some processors will be so bold as to charge 25 percent per transaction. Not cool.

To be successful you need to look at your overhead very closely. After it’s all said in done, you definitely need to make a profit, so have a percentage in mind and get several quotes from payment processors. But be sure that what your quoted is indeed the percentage per transaction.

You may be surprised by hidden startup fees and other fees that are tacked on to monthly bills and fees per transaction. Get a breakdown, because you have to consider statement fees, terminal fees, non-compliance fees, and more. Always be sure to check the contract closely before signing on the dotted line.

4. Ensure customer support is top-notch

When dealing with any type of transaction, whether online or brick-and-mortar, unpleasant things can happen. For instance, if you have a sizable order where a chargeback is issued, you need to get on the phone with a human customer support agent that can help you understand how to handle it.

Why is this important? How your CBD payment processor handles the situation can directly affect your customer experience.

Before choosing a CBD payment gateway provider, ask important questions like; How transaction disputes are handled? What is the timeframe for refunds? And the list goes on. Be thorough and get the full rundown on how the payment processors customer support works.

Simplify obtaining a CBD merchant account and payment processing with

As you have already concluded, setting up a CBD merchant account and payment processing system is no easy task. But it doesn’t need to be all that challenging. With ecommerce, you get a platform and team that does the heavy lifting for you. allows you to:

  • Pair any front-end with your payment processing
  • Track and manage orders
  • Boost credit card approval rates
  • Plug-in to your fulfillment sources
  • Handle returns easily
  • Forecast potential earnings
  • Get real-time insights to increase ROI delivers powerful ecommerce solutions for CBD sellers with industry-leading payment processing solutions you can depend on, supporting a variety of payment gateways and direct access to CBD merchant account providers.

Stop getting the runaround, or getting taken advantage of through high transaction fees.

Learn how can help you capitalize on every CBD order with data-driven results.