If you’re struggling to secure merchant services for your CBD business, our team at is ready to assist you with:
A CBD merchant account is a specialized high-risk bank account provided by a merchant service provider (MSP) that allows businesses to accept credit and debit card payments for CBD products. Once transactions are settled and applicable fees are deducted, the funds are transferred to your business bank account. MSPs that specifically serve CBD enterprises are equipped to effectively underwrite, approve, and process these higher-risk transactions.
Securing payment processing for your CBD business is a straightforward process. Simply complete our contact form, and an account manager will reach out to discuss your merchant processing requirements. After evaluating your business details, your dedicated account manager will offer insights into the most suitable payment solutions for your operations. Once you decide to proceed, your account manager will secure and customize the selected solutions. Upon approval, you can begin processing payments as early as the next day.
Provide us your contact details and we will schedule a call.
Cannabidiol (CBD) is a chemical compound derived from the cannabis sativa plant, particularly from hemp, which is a variety of cannabis that contains low levels of tetrahydrocannabinol (THC), the compound responsible for the psychoactive effects of marijuana. Unlike THC, CBD does not produce a “high,” making it an appealing option for individuals seeking relief from various conditions without the mind-altering effects associated with cannabis.
The necessity of a CBD license is contingent upon the state in which your business is located and operates. Additionally, various factors influence this requirement, including the locations where you sell your products, the sources from which you obtain your products, and the revenue generated from the sale of CBD items.
At Karma Card Payments, our mission is to offer affordable credit card processing solutions tailored for adult businesses. With our comprehensive understanding of the unique challenges within the adult industry, we provide cost-effective payment options for our partners.
We help our clients avoid excessive fees and navigate the registration requirements imposed by payment networks like Visa and Mastercard. Reach out to us today to learn how our team can assist your adult business in saving on all aspects of payment processing!
The legal framework for selling cannabidiol (CBD) online is complex and varies significantly by state and federal regulations. Understanding these legal requirements is crucial for anyone looking to enter the CBD market online.
Key factors to consider include:
Licensing: Many states require at least a business license, and others may require specific CBD licenses, such as a consumable hemp product license. The exact type of license varies by state.
Testing and Labeling: States may mandate third-party testing of CBD products to confirm THC levels, and proper labeling is usually required. Accurate product labeling includes information on potency, ingredients, and potential allergens.
Sales Channel Compliance: Regulations can differ based on where products are sold, so online sales may be subject to different rules compared to brick-and-mortar sales. Retailer registration might be necessary even for online platforms.
Marketing and Advertising Restrictions: When selling CBD products online, sellers must also adhere to marketing regulations. The FDA restricts health claims about CBD products, and misleading advertising can lead to enforcement actions. Additionally, CBD advertisements may need to comply with regulations from the Federal Trade Commission (FTC).
Financial and Banking Considerations: Due to the high-risk nature of CBD, securing a merchant account specifically for CBD transactions can be challenging. Many payment processors categorize CBD as a high-risk commodity. Therefore, using a provider familiar with the requirements of CBD sales is essential for business viability. Required documentation may include lab reports, information on product sources, and proof of compliance with state regulations.
To obtain a CBD merchant account, businesses typically need to provide the following documentation:
Government-issued photo identification: Verification of business ownership.
Signed merchant application: Formal request for account approval.
Voided check or bank letter: Confirmation of a business bank account.
Three months of bank statements: Financial history assessment.
Three months of processing statements: Insight into prior payment processing activity.
Current certificate of analysis (COA) for CBD products: Ensuring product compliance with THC content regulations.
List of suppliers for CBD products: Verification of sourcing and compliance.
When you collaborate with Karma Card Payments, your account manager will evaluate the unique requirements of your CBD business to align you with the most suitable point-of-sale (POS) software for your operations. We partner with numerous providers that specialize in serving CBD businesses; however, PAX’s POS software stands out as a preferred choice among our CBD clients due to its user-friendly interface and aesthetically pleasing devices.
Adult Payment Gateway
Our adult payment gateways are specifically designed to help online adult businesses enhance their profitability. By providing secure payment gateways, we enable you to access payment options tailored to your unique products and services. Whether you want to implement subscriptions for recurring revenue or offer discounts to reward loyal customers, our adult payment gateways are ready to support you!
Chargeback Protection
Chargebacks are a significant concern for businesses in the adult industry. While they result in immediate revenue loss, the long-term impacts can be even more severe. Excessive chargebacks can lead to lawsuits from card issuers and a complete loss of access to credit card payments. We utilize advanced chargeback prevention tools to protect our clients and help them successfully contest cases of “friendly fraud.”
Fraud Prevention Tools
Fraud prevention is a top priority across all our payment products. Our solutions incorporate sophisticated fraud detection tools to identify suspicious transactions before they are processed. Given the high risk of credit card scams in the adult industry, it’s essential to partner with a payment processor that is well-equipped to combat threats from online fraudsters!
Although the CBD industry is experiencing significant growth, establishing a CBD business involves more than merely creating a website and selling products. Given the various regulatory challenges involved, it is essential to have a thorough understanding of CBD regulations prior to launching a CBD business.
Adult Payment Gateway
Our adult payment gateways are specifically designed to help online adult businesses enhance their profitability. By providing secure payment gateways, we enable you to access payment options tailored to your unique products and services. Whether you want to implement subscriptions for recurring revenue or offer discounts to reward loyal customers, our adult payment gateways are ready to support you!
Chargeback Protection
Chargebacks are a significant concern for businesses in the adult industry. While they result in immediate revenue loss, the long-term impacts can be even more severe. Excessive chargebacks can lead to lawsuits from card issuers and a complete loss of access to credit card payments. We utilize advanced chargeback prevention tools to protect our clients and help them successfully contest cases of “friendly fraud.”
Fraud Prevention Tools
Fraud prevention is a top priority across all our payment products. Our solutions incorporate sophisticated fraud detection tools to identify suspicious transactions before they are processed. Given the high risk of credit card scams in the adult industry, it’s essential to partner with a payment processor that is well-equipped to combat threats from online fraudsters!
Kratom is legal in the majority of countries, and there are generally no restrictions on its sale. However, it is advisable to review your local laws prior to selling Kratom to ensure compliance with all relevant regulations.
CBD and hemp products are classified as “high risk” due to several significant factors primarily related to regulation and market dynamics. Legally, until the enactment of the 2018 Farm Bill, cannabis products containing any level of THC were categorized as federally illegal, which made it impossible for merchants to secure CBD merchant accounts. The 2018 Farm Bill redefined the legal status of hemp, allowing states to establish their own regulations surrounding the sale of CBD products, although the future of such legislation remains uncertain. The evolving legal landscape raises concerns about potential rollbacks to more restrictive regulations, leading to elevated risk perceptions among payment processors.
In addition to legal complexities, the alleged therapeutic benefits of cannabinoids are often not substantiated by scientific data. This uncertainty can leave customers with unmet expectations, prompting them to initiate chargebacks. The higher likelihood of chargebacks associated with CBD products is a primary reason why financial institutions categorize the CBD industry as high risk, significantly impacting processing options and associated fees.
