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October 20, 2022

5 Questions Payment Processors Ask Online CBD Retailers

Jarett Theberge

Written by:

Jarett Theberge

5 Questions Payment Processors Ask Online CBD Retailers

Business is booming for the CBD industry, and that trend doesn’t seem like it’s going to stop anytime soon. In fact, the CBD market is expected to grow 15-fold in the next decade. Some big players are in the game; this is the perfect time to open up your online shop and sell CBD.


However, getting into the CBD game has its hurdles. One of those hurdles is finding the right payment processing partner. Do you think that any processor will take on your online CBD business? Think again.


For starters, payment processors like PayPal and Stripe are notorious for not accepting online CBD merchants. The risks involved with processing CBD payments are seen as too risky for some companies, which might outweigh the benefits. 

Because while CBD derived from hemp is federally legal, CBD can also derive from other substances that are still federally controlled. 


When you find a payment processor for your online CBD business, you’ll be tasked with meeting a specific set of standards and submitting all the required documentation.


It may tax your valuable time as you run down to fulfill all the requirements to start selling CBD.

As daunting as it may seem, don’t worry – Electronic Merchant Systems(EMS) has you covered. For over 30 years, EMS has supported small to medium-sized businesses all across the United States with our innovative solutions and unfailing support.


To help you better prepare to sell CBD online, we’ll explain what payment processors and merchant service providers look for when signing on with CBD merchants. The quicker you check all these boxes, the quicker you can start making some serious money.


Let’s get started!



  1. "Where's our certificate of analysis?"
  2. "Are you registered as high-risk for online sales?"
  3.  "What kinds of CBD products are you selling?"
  4. "Do you make any medical claims?"
  5. “Do your products have a label of the proper ingredients?”

  6. Get Your Online CBD Business Started Today



1. “Where’s your certificate of analysis?”

 A certificate of analysis (COA) is a document that verifies that manufactured products meet the requirements of the customer. The product, in this case, would be CBD. This document gives your processor and customers confidence that your products are legitimate and safe to use.


The COA not only leaves the manufacturer and your business accountable but also keeps track of the product transportation history from the factory to the storefront. You'll need a current COA to hand into your payment processor. The more recent, the better. 


The Food and Drug Administration (FDA) has a list of requirements of items that need to be fulfilled on the COA:

-          Supplier Information

-          Materials Identification

-          Transportation Data

-          Evidence of Conformance

-          Signature Data

-          Amount of THC

Given the legal sensitivity of CBD, COAs are a great sense of assurance to have should you get audited or are faced with product recalls.

The COA should indicate that there is less than 0.3% THC by volume in any of your CBD products. THC is the psychoactive compound found in federally controlled substances that produces a high for the user. CBD, on the other hand, does not create a high, so the COA should reflect.


2. “Are you registered as high-risk for online sales?”

CBD is just one of many industries considered high-risk for online sales. In short, a high-risk merchant is a merchant that is designated as having a higher likelihood of fraud or is perceived to have greater odds of financial failure by payment processors. 


Your high-risk registration will have to be done through your payment processing partner, and you’ll most likely need the following list of items:

-          Incorporation/business certificate

-          Shareholders’ certificate

-          Structure Chart

-          Personal Identification (passport, state I.D., social security card)

-          Business license number and name of the organization that issued said license


Since CBD is so closely related to federally controlled substances, payment processors and banks designate the industry as high-risk to keep themselves safe. Being registered as high-risk will result in higher fees, but it’s insurance for your business if a case of fraud is brought against you.


3. “Which kinds of CBD products are you selling?”

CBD doesn’t come in just one form. One of the reasons why CBD is so popular is because of the various ways it can be applied and/or consumed. This gives your customers more choices that match their preferences.


CBD can come in the following forms:

-          Dry flower

-          Topicals (lotions)

-          Food

-          Drinks

-          Tinctures

-          Vaporable liquids

Keep in mind that none of these products should have more than 0.3% THC by volume.


It’s imperative that you check with your payment processor which products you can sell. For example, it isn’t easy to find processing for dry flower CBD, especially if you’re selling it online.


If you plan on selling vaporable CBD, you’ll need an Attestation of Compliance (AoC). This is a document that states the merchant’s compliance with the Payment Card Industry Data Security Standard (PCI DSS)


4. “Do you make any medical claims?”

Making medical claims is a no-go if you plan on selling CBD. Both the merchant and the manufacturer of the CBD products are on a tight leash in terms of what they can and can’t say about the effects of CBD.


Government agencies, such as the Food and Drug Administration (FDA), have sent warning letters to companies claiming CBD’s effect on diseases. This might change when CBD is finally FDA-approved. In addition to not being allowed to make medical claims, vendors cannot market CBD as a dietary supplement either.


However, you may make broad claims on the effects of general health. Phrases with words like “wellness” and “supports” may be permissible.


5. “Do your products have a label of the proper ingredients?”

Listing ingredients for CBD products isn’t as easy as writing “CBD: 100%”, sticking it on the back of the package, and calling it a day.


It might go without saying that CBD in the form of drinks, foods, and lotions will have ingredient lists, but the same goes for dry flowers. 


All CBD products must have the following:

  • strain information,
  •  manufacturer’s name and location
  • net quantity of contents.


As the CBD industry becomes bigger, other standards may become implemented that currently only exist at the state level. These include FDA warning statements and QR codes that link to COAs.


Get Your Online CBD Business Started Today

After reading this piece, you should be more prepared to start a conversation about taking on your online CBD business with payment processing.


If you’ve done all you have to do so far, and you’re ready to start that conversation today, so is Electronic Merchant Systems.


We’ve been working with CBD merchants as we stay on top of market trends, and we can’t wait to speak with you.



You may also be interested in these blogs:

Laws and Regulations in Payment Processing You Should Know For 2022

The Best CBD Payment Processing Companies in 2022

How to Process CBD Payments Online & Succeed in a Growing Industry




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