blog
29 November 2018

Payment Processing for Businesses That Sell CBD Oil

The cannabidiol (CBD) market is estimated to surge by 700 percent by 2020, and a study by market intelligence firm, Hemp Business Journal, estimates the market will grow to $2.1 billion by 2020. Research indicates that CBD oil has so many therapeutic advantages, also involving antioxidant and neuroprotective features. CBD includes no tetrahydrocannabinol (THC), so it does not have the same psychoactive impact as marijuana.

Increase in hemp-based products is solely a piece of the cannabis industry complex. The all-around legal cannabis industry is likely to hit $57 billion by 2027, ae per ArcView Market Research.

Selling in the CBD Oil Market

Though CBD oil is wholly available for disposal and there is an obvious market for these products, a lawful murkiness surrounding these products makes it challenging for merchants to operate a business in the sector.

Right now, 31 states and the District of Columbia have made lawful medical marijuana. Nine of those states, involving California, Massachusetts, and Colorado also as the District of Columbia have also made lawful recreational marijuana. But, selling marijuana violates federal law and undertaking any receipts from a marijuana sale is perceived money laundering.

Besides, even in states where marijuana use is lawful, the federal Drug Enforcement Administration still categorizes CBD extract as a Schedule 1 substance. Taken over the DEA’s most restricted classification, Schedule 1 substances are termed as drugs that have no acceptable medical benefits.

How Do CBD Oil Merchants Move Ahead?

The complexity between federal and state regulations, also customers’ demands for cashless payment options, makes it very challenging for CBD oil merchants to function.

Banks and classical credit card processors are restricting themselves to work with merchants that sell CBD oil since they are scared they may be penalized if items are disposed online and shipped to a place where CBD is unlawful.

In order to function, businesses should either seek a CBD oil merchant account from a high-risk provider or constitute Point of Banking (POB) system.

CBD Oil Merchant Account vs. POB

A CBD oil merchant account permits a business to receive and process credit cards. A POB terminal permits you to receive credit cards without a merchant account. A POB terminal seems like an ATM, but it does not dispense cash. Users swipe their cards and punch on PINs, and then, consumers gets receipts, which they utilize to incur for their items. After the sale is finished, the customer gets his/her balance in cash. Utilizing point of banking not just saves merchants from the obstacles that can bring up with an opening a merchant account and incurring percentage fees for processing card transactions, it minimizes their risks of refunds, chargebacks, and fraud.

Though POB may look like a much better choice over a merchant account, there are few significant reasons to consider. Obviously, POB will not be a choice for an online business because customers have to swipe their own cards and hand over the receipts to merchants. Also, because merchants will need to return any change to customers in cash, they will require to have more cash in hand.

Make Merchant Account Approval Smoother 

If you desire to move ahead with a CBD oil merchant account, there are easy steps you can do to enhance your chances of getting approved. Before applying for merchant accounts, you must make sure they have several months of good processing track record and few chargebacks. Processors also feel good about businesses to have a good number of sales and a significant balance in the bank, in case of any contingencies. In wholesome, when processors see your business, they want to have a legitimate collaboration that is profitable and productive.

In Conclusion

As the CBD oil industry surges and a cashless society occurs, merchants have no option but to consider all possible choices.

Businesses looking for payment remedies for high-risk collaborations, such as CBD oil merchants, should move to https://tovo.io. It focuses on solutions for all kinds of businesses, and it proposes CBD oil merchant accounts and point of banking choices. Just go for an online application today. The procedure is fast and easy.

 



 

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