CBD Businesses: 5 Things to Look for When Choosing Your Merchant Services Partner
September 3, 2019
In today’s rapidly changing CBD retail landscape, partnering with the right credit card processor can often be the difference between increasing revenue and cash flow or losing market share to new competitors. But how do you know what to look for in a merchant services provider?
Thanks to the passage of the 2018 Farm Bill, sales of cannabidiol (CBD) products are poised for explosive growth. The new law eased restrictions on interstate commerce and selling CBD products online, which has resulted in a flood of new retailers, both online and brick-and-mortar, selling a myriad of CBD wares. A recent report by cannabis researchers BDS Analytics and Arcview Market Research projects that U.S. sales of CBD products will skyrocket from $1.9 billion in 2018 to $20 billion by 2024, representing a compound annual growth rate of 49%.
While passage of the Farm Bill has been a boon to CBD businesses, retailers are still considered high-risk merchants because of the ties to marijuana, which is still illegal in many states. As a result, CBD retailers have fewer choices when it comes to selecting a credit card processing company.
Here are five things to look for when deciding which credit card processing partner is best for your CBD business:
1. A quick approval process
The credit review process to obtain final approval for a high-risk CBD merchant account requires a more thorough analysis of the business and its owner(s) compared to a low-risk account. You shouldn’t, however, have to wait more than 14 business days to get your account approved. When selecting a provider, look for one that will provide guidance during the application process to help get your account approved.
2. Fast funding
If your processor says it will take more than three days to fund your account, then it might be time to find another provider. Look for a partner that offers secure, US-based funding as opposed to offshore funding. Domestic funding times are typically anywhere from 1-3 days whereas offshore transactions can take 5-10 days. Cash is king – don’t settle for a credit card processor that can’t ensure you’re paid quickly.
3. Fee transparency
You shouldn’t have to be a math whiz to calculate how much you are paying for credit card processing. Fee schedules should be transparent and easy to read. Ask to see an example of a monthly statement. Avoid processors if the fee schedule is too confusing and you can’t see what services you are being charged for and how much they cost.
4. The right technology
Don’t limit your business by using outdated hardware. Partner with a merchant service provider that offers the latest technology with top-of-the-line security and the ability to accept in-store, online and mobile payments. Using the right technology makes it easier for customers to purchase your CBD products and for you to receive funding from your processing partner.
5. Superior customer service
Time is money when it comes to resolving processing issues that slow funding or technology glitches that lead to down time. That’s why at Iroquois Merchant Services, every client has a dedicated customer service contact and 24/7 service support. Don’t get stuck waiting on hold or talking to a machine. Partner with a processor that you’re confident will provide extraordinary customer service and quickly respond to and solve problems in a friendly manner.
The future is bright for CBD retailers – and other high-risk merchants. Don’t let slow credit card processing keep you from growing your business. Follow these five tips to ensure you partner with a reliable merchant service provider that has your back.
Ready to take the next step?