CBD oil is a hot commodity. And it’s no wonder considering the non-psychoactive cannabis-derived product offers a whole host of health benefits without any mind-altering effects.
This has attracted many entrepreneurs who recognize the growing demand for such a product. But while an online CBD shop may sound like the perfect business, there can be a few obstacles that potential entrepreneurs must traverse before the money starts rolling in. One of the biggest is getting themselves a merchant account for their CBD startup.
What is a merchant account?
So you’ve set up a slick looking online shop, established relations with suppliers, and you’re ready to start spreading the word about the many miraculous benefits of CBD oil. But there’s still one problem – how are your customers going to pay you?
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That’s where a merchant account comes in. A merchant account is basically a bank account for businesses who sell a product or service (merchants). Along with a payment gateway, which is usually provided alongside a merchant account, this will allow you to accept online card payments. Your acquiring bank will capture the customer’s card details, charge the card, and subsequently deposit the funds into your own bank account.
For most industries, obtaining a merchant account is a formality. But because of the stigma attached to any cannabis-related industries, getting a merchant account for your CBD business is considered high risk and, therefore, many of your usual avenues for getting a merchant account are unavailable.
How do you get a CBD merchant account?
When it comes to getting a merchant account for your CBD business, there are a few steps you can take to improve your chances.
- A professional looking store
- High-quality products from reputable brands
If you want banks to take you seriously and to trust you, you need to offer high-quality products, preferably from well-known and reputable brands. Nothing screams unprofessionalism more than home-made bottles with handwritten labels with product photos taken your webcam…
- Strong financials
Merchants don’t need to be millionaires or successful business people already, but a healthy bank account and credit history are an important part of getting acquiring banks to have confidence in you and your business.
This is where most will fail. Don’t be discouraged if you’re turned down by banks. This is expected and it will take time to learn what banks want from you and to find the right one for your venture. Keep your head up and press on, it will separate you from the crowd and prove your seriousness when it comes to making a successful business.
- Contact high-risk specialists
High street banks and well-known names are rarely going to want to work with anything to do with cannabis, so don’t be afraid to cast your net wider, particularly targeting high-risk specialist acquiring banks. Their rates may be higher but they might be your only option until you have some processing history behind you.
CBD oil is an expensive product with a high profit margin. Demand will only increase with every news story proclaiming its health-promoting effects and miraculous curing power. This means right now is the ideal time to get into the industry. Just make sure you know what to expect when it comes to getting a CBD merchant account, adhere to the steps above to increase your chances, and be persistent. It could be very worth it in the end.
[Image credit- Pixabay]