This feels backwards.
The banking industry is still holding everyone back. But why?
Some entrepreneurs who’ve worked with high-risk processors tell me that they are not the easiest to find, or sometimes to do business with. When they work, they mostly work. But there is a cottage industry of independent brokers that isn’t always helpful or well-connected. Sometimes you have to set up an overseas entity and then funnel the money back to the US. Sometimes you’re just too small.
By Dan Frommer on Wednesday, April 10, 2019 at 7:00 am
A new bill, the SAFE Banking Act — which would “provide federal protection for financial institutions that serve state-authorized marijuana and ancillary businesses” and specifically “improve access of financial services to minority- and women-owned cannabis businesses,” according to Marijuana Business Daily — is working its way through Congress. If it becomes law, it could help open the floodgates.
To start, it’s important to know the particular categories of businesses and business practices that are restricted by Stripe. According to their website, the following lists the general types of businesses without getting into specific products or services.
To start, Stripe CBD payment processings is categorized as a restricted business. The company does not allow certain types of industry to process due to various concerns. These exact issues are often regulatory, legal, or brand confilics. Moreover, restricted business categories exist with all financial service providers, not just Stripe.
Luckily, there are other payment gateway options out there. Moreover, they’re more qualified to handle your businesses than a Stripe CBD payment gateway. A payment processor that specializes in high risk verticals has rare banking relationships that allow them to accept higher risk businesses such as CBD merchants.
Products or Services That Are Restricted By Financial Partners
Say you choose Stripe for your CBD merchant account payment processing. It’s only a matter of time before you could get your merchant account dropped. This can happen fast and could be avoided.
Stripe’s CBD policies are different than those of a high risk payment processor. Therefore, specific high risk solutions eliminate the chance of having payments interrupted.
Can I Sell CBD On Stripe?
These high risk merchant accounts require special attention, when it comes to their payment processing. In this case you’ll want to stop using Stripe for CBD, and apply for a new account.
It is clear that the CBD industry has exploded. Moreover, companies who want to sell online have to search for payment processing like Stripe CBD. With the fast-growing amount of CBD merchants that are flooding the market, they may need alternatives that aren’t restricted. Furthermore, the demand for high risk payment processors, as opposed to the ones offered with Stripe payment processing, is on the rise.
I woke up that morning to an email saying that our application was pending, but the bank was backed up, and nobody knew how long it would take. When I finally got to speak with our broker, they outlined several alternative solutions that I spent the rest of the day applying for. Through all of this, here’s what I learned.
But first, let’s rewind to late December 2018 for a moment, when Donald Trump signed the 2018 Farm Bill into law. This made marijuana plants and products derived from them federally legal as long as they contain less than 0.3% THC. This excited all corners of the medical marijuana world.
If you’re swiping credit cards on location, then you may be in luck, as there are some credit card payment terminal providers, like Naturepay and GreenBox, who are still in the game. This is what the dispensaries use. It puts the money from the swiped card into your bank account.
This is what everyone wants, and what Elavon provided, and only one remaining bank now provides. But for companies who haven’t submitted an application yet and aren’t doing at least $200,000 a month in sales, don’t waste your time applying before the dust settles.
3. Offshore Credit Card Processing
Elavon was responsible for a rumored 90% of online CBD merchant payment processing in the United States. So, on March 14, nearly all CBD brands began scrambling for a new solution before losing their ability to accept credit card payments.
In case you haven’t been plugged into CBD industry news recently, it seems the Farm Bill honeymoon is officially over, as major U.S. banks and payment processors have recently turned their backs on CBD, dropping their existing CBD brand clients.