If you are running a cannabidiol (CBD) or hemp-related shop, be it an e-commerce store or a physical store, you probably know the struggle of having to find a payment service provider that is willing to provide its services to your business. Because CBD and hemp are being very closely related to cannabis and, thus, are associated with the still-standing negative stigma surrounding not only the plant itself but also recreational marijuana use, many gateway service providers and payment processors are considering CBD to be a ‘high risk’ industry.
Luckily, there are payment service providers like Powercash21 that are willing to process payments from CBD merchants. But why are companies like Powercash21 supporting CBD and hemp shops while traditional payment service providers are refusing to process their payments?
The struggle of getting paid as an online CBD shop
How big of a problem it is to find a suitable payment service provider becomes especially apparent when you are running a CBD online shop, seeing as, in addition to the just named factors, there is also a massive risk of fraud that is associated with internet retail. In the UK, for example, many CBD stores are struggling with payment solutions.
Chargebacks are more common in online shops than in physical stores and more people feel like they can get away with fraud if they can hide behind the supposed anonymity of the internet. This makes it even harder to find a payment service provider that is willing to process the payments of your CBD retail shop.
While CBD is now starting to gain traction and favour, in the past, confusing regulation around the globe and a lack of credible research caused CBD products to be seen as a risky proposition. The association with cannabis also contributed to this perception and had a hand in shaping a somewhat negative general opinion about CBD products.
Still, even with CBD, and cannabis in general, making a more positive name for itself, traditional payment service providers like banks are hesitant to process anything relating to CBD products or CBD-related businesses.
Just like in the UK, in America, where cannabis is now legal in 33 states, cannabis businesses are also struggling to finance themselves. This is because most financial institutions, like traditional banks, Mastercard and Visa will not work with cannabis firms because they fear federal prosecution.
The benefits of having a payment service provider that works with your CBD business
A good payment service provider can control and lessen the risk of fraud that your CBD shop is experiencing by using a set of different risk management tools to detect and identify fraudulent practices.
Some of these tools are Fraud Management via Velocity Checks, used to review payment transactions for repeating patterns, 3D Secure, which is used to prove that the card user is the legitimate holder of the card, Geo-Conflict, which tracks the location of the payment to authenticate the card user, BIN Lookups and Pre-Authorisation.
Another very important aspect of processing online payments are PCI compliance and General Data Protection Regulation (GDPR). Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that must be followed by any company that accepts, processes, stores or transmits payment-related data in order to securely process credit and debit cards. Additionally, customer data has to be anonymous and encrypted.
However, while this is all nice in theory, in practice, most credit card companies or payment service providers won’t work with CBD businesses. This does not only negatively impact CBD companies but also customers, who are unable to buy a product that they are legally allowed to buy.
Why Powercash21 processes CBD merchant payments while others don’t
Powercash21 is a payment service provider that has a lot of experience with ‘high risk’ industries. Its ability to adapt and rapidly adjust to new regulations is what sets it apart from other payment service providers and makes it an ideal partner for your CBD e-commerce business.
To ensure the highest standard of payments risk management, Powercash21 takes special measures, like providing CBD merchants with various tools that help to identify and prevent fraud. Additionally, in order for CBD merchants enable merchants to use its payment processing services effectively and efficiently, Powercash21 ensures seamless ‘plug-and-play’ integration into its payment gateway.
Powercash21 offers fully customisable checkout pages that are designed to provide the best customer experience. It also ensures that all of its CBD merchants fulfil certain criteria in compliance with the laws and regulations of the European Union and the European Central Bank.
For example, since only CBD products with less than 0.2 percent of tetrahydrocannabinol (THC) are legal, Powercash21 requires a lab test certification that confirms that you are conforming to this law.
Once you have made a CBD merchant account and fulfilled all the legal requirements, you will have access to all of Powercash21’s services. Including its checkout pages on your website, its risk management and reporting tools and a dedicated account manager for 24/7 support.
What makes Powercash21 the best payment service provider for your CBD merchant account
In order to build trust with customers and ensure that all security protocols, such as PCI compliance and GDPR are fulfilled, Powercash21 has developed its own PCI Level I certified technology to process and store data. After being processed, customer data is made anonymous and stored in a cryptographic vault through tokenisation via a secure TLS 1.2 SSL connection.
Further, Powercash21 understands that the appearance of any online shop is of great importance to customers and their shopping experience, which is why it offers fully customisable checkout pages that can be integrated into your online shop, equipped with your branding, of course. This way, your branding is present throughout the customer payment journey, which reinforces customer awareness and loyalty. What’s more, checkout pages are offered in multiple currencies and languages.
And, to top it all off, even though a very large percentage of the population uses Visa and Mastercard to pay for goods and services online, Powercash21 offers a wide range of alternative payment methods since it knows that localisation is important to ensure a smooth customer payment journey.
If you want to learn more about Powercash21, how it can help your CBD or hemp business and why it offers the best CBD merchant account, check out this article.