Looking for a
payments provider for your CBD business? Here’s what you need to know…
CBD products are serious business. Sales throughout
countries where the products are legalised are growing exponentially: it’s
expected that in the USA, annual sales in the industry will reach $2 billion by
2022, making it one of the fastest growing markets in existence.
What is CBD and why
are people going crazy about it?
CBD (cannabidiol) is a non-psychoactive cannaboid extract
that can be taken from both marijuana plants and industrial hemp. CBD’s main
difference from marijuana is that it contains less than 0.3% THC, the active
psychoactive chemical in marijuana; marijuana itself typically contains over
30%. As such, users of CBD products can’t get high from them, but they can
still enjoy several additional benefits associated with marijuana and hemp.
CBD products are used to relieve rheumatic pains, deal with
anxiety and depression, alleviate cancer-related symptoms, fight acne and improve
cardiovascular health. Products containing CBD are numerous and varied, and
include orally-ingested oil, body lotions, tea, coffee, bath bombs, vape
liquids and even sweets!
More and more CBD start-ups are taking advantage of public
demand and developing new and exciting products that are helping users’ health
in myriad ways.
Payments for CBD
Research carried out by Brightfield Group in 2017 found that
over 60% of sales for CBD products are completed online. But if CBD companies
want to maximise their online profits, they need to make sure they create the
perfect payments ecosystem that boosts sales by minimising customer drop-off
and ensures that transactions are fast, simple and secure.
There are a number of key factors that CBD companies need to
look for when choosing an online payment provider:
Companies that sell CBD products fall into the ‘high-risk’
category when it comes to setting up a merchant account and building
relationships with payment service providers. Payment companies may be
reluctant to take them on board because of the reputational risks associated
with this type of business.
Business model, practices, excessive chargebacks or legal
exposure can cause a negative image of the payments company, leading to a
merchant’s application being declined. Although CBD products are legal, the
obvious connotations with drugs mean that many payment companies will steer
clear of merchants’ business for fear of tainting their company’s image.
For CBD-associated businesses, choosing a payment provider
which has experience and trust in high-risk accounts is absolutely essential.
The enhanced reputational risks associated with CBD product
companies can drive transaction fees northwards. Payment companies are well
aware that if they do accept high-risk CBD merchants they are one of a limited
group and can therefore charge higher transaction fees.
CBD companies can rest assured, however, that there are
payment providers out there that do not charge extortionate fees for their
merchant accounts. They should speak with payment companies with experience in
high-risk industries so that their experts can understand the business model
and company ambitions. This will help to keep transaction fees as low as
possible, as the payment company will better understand the nuances and risks
involved in processing payments for the CBD business.
Local payment methods
With CBD trade booming in various affluent countries around
the world, it’s important to build a payments ecosystem that caters for
different markets. This is important for two reasons: firstly, online
businesses can ensure that they offer the preferred payment method no matter
who or where their customer is; secondly, they can engineer the payment methods
they offer in order to expand into new markets.
When a customer reaches the checkout of an online store,
they want the payment process to be as quick and easy as possible. Different
countries have different preferences when it comes to payment method. For
example, 40% of eCommerce transactions in Malaysia are done by bank transfer,
meanwhile 57% are completed using eWallets in China, and 65% of online payments
are card-based in the UK. Flexibility, convenience and understanding a
country’s consumers are key to making perfect payment conditions for your CBD
Offering different payment methods can catapult your
business’ influence in different markets to new heights. Key countries where
CBD products are popular, and where business is lucrative include Austria,
Belgium, Denmark, the Netherlands, Romania, Spain, and Italy. CBD businesses
need to choose a payment provider which offers the necessary local payment
methods preferred in these countries, to achieve the international expansion
that the hype around CBD products can bring about.
Trust Payments and sister-company acquiring.com have a growing list of CBD companies who have chosen their payment gateway and acquiring solutions for their eCommerce platforms. With a wealth of expertise in providing payment services to high-risk merchants, Trust Payments/acquiring.com are perfectly positioned to help any CBD business grow their online offering, connecting with new, international markets, and ultimately boosting sales.
To find out how Trust Payments/acquiring.com’s innovative payment solutions will drive your CBD business into the future, speak with one of our team of experts today.
We will be at the Merchant Payments Ecosystem (MPE)
conference in Berlin from February 19th to 21st. To set
up a meeting, get in touch with us on 02036912697 or connect with us on