CBD Payment Processing: What CBD Owners Need To Know

CBD, a compound derived from the cannabis plant, is considered a high-risk product category by most traditional payment processors despite being widely sold across the country. Though legal, dealing with payments in this space brings certain risks to banks and processors. This means that there aren’t too many payment processors out there willing to work with CBD businesses.

In turn, this creates significant challenges for CBD retailers in accepting payments and accessing essential banking services. The murky legal landscape surrounding CBD products is the primary reason behind this high-risk designation from banks, payment processors, and insurance companies.

In this blog, we will dive deeper into why CBD is labeled as “high-risk,” provide a comprehensive guide on how to choose the best CBD payment processor, highlight some of the options available, and why you should choose KORONA POS and its payment processor merchant partnerships and integrations.

Key Takeaways: CBD Payment Processing

  • CBD businesses face challenges in accepting payments as CBD products are considered “high-risk” by many payment processors due to regulatory uncertainty, chargeback risk, and reputational concerns.
  • When choosing a CBD payment processor, businesses should look for CBD-friendly providers, evaluate fees and rates, consider integration and user experience, and check for additional services like chargeback management.
  • Some recommended CBD payment processors include Square and Clearent. 
  • KORONA POS integrates with various payment processors for CBD businesses.

Do you have trouble finding a CBD payment processor for your store?

KORONA POS can help. We’re not a payment processor but a POS software built for high-risk businesses like CBD. We integrate with any processor and we’ll always find the best payment provider for your business’s needs.

Call us now at 833.200.0213 to learn more.

Why Is CBD Considered “High-Risk” in Payment Processing?

CBD isn’t considered high-risk for consumers, but it is for businesses dealing in CBD. This “high-risk” designation comes from banks, payment processors, and insurance companies. Here’s a deep dive into why: 

Regulatory uncertainty

The major culprit is the hazy legal landscape surrounding CBD. While CBD derived from hemp (with low THC content) is federally legal in the US, the Food and Drug Administration (FDA) has yet to fully approve CBD for widespread use. This lack of clear regulations makes payment processors wary of potential legal repercussions associated with processing CBD transactions.

Chargeback risks

CBD products’ relatively new and evolving nature can lead to confusion among consumers. They might not understand the product fully or have unrealistic expectations about its effects. This can result in a higher rate of chargebacks (when a customer disputes a transaction and gets their money back), which is a red flag for payment processors.

Reputation management

Payment processors are cautious about associating themselves with industries that might tarnish their reputation. CBD, despite its growing acceptance, still carries some stigma due to its association with cannabis.

​​Limited banking options

Due to the reasons above, many traditional banks are hesitant to work with CBD businesses. This can make it difficult for these businesses to open accounts and access essential banking services. They might have to turn to high-risk merchant account providers, often with higher fees and stricter terms.

How to Choose a CBD Payment Processor

This pictures shows a laptop and the leave representing CBD; The picture is somehow an illustration how to choose CBD payment processor.

Choosing a CBD payment processor for your retail business requires careful consideration due to the unique regulatory environment surrounding CBD products. Here’s a comprehensive guide to help you navigate through the process:

Look for CBD-friendly processors

Not all payment processors are willing to work with CBD businesses due to the perceived risk associated with the industry. Many mainstream payment processors like PayPal and Stripe do not support CBD transactions. Research payment processors who have a solid understanding of the CBD industry and its regulations and experience with processing CBD payments.

Evaluate fees and rates

Consider the fees charged by the payment processor, including setup fees, monthly fees, transaction fees, and any additional costs associated with integrating the payment gateway with your website or POS system.

Look for payment processors that offer secure payment gateways, fraud prevention tools, and PCI compliance to protect your business and customers’ data. Assess the payment methods accepted by the processor, such as credit cards, debit cards, e-wallets, and mobile payments.

Inquire about the customer support provided by the payment processor, including availability, responsiveness, and industry expertise.

Reviewing payment processor requirements

Payment processors may require specific documentation and information from your business, such as licenses, permits, product details, and marketing materials. The right CBD payment processing provider should have a “TRUE CBD Program” that gathers all the necessary CBD paperwork to verify your business is legitimate. 

Be prepared to provide a detailed business plan, financial statements, and proof of legal compliance with state and federal regulations. Some payment processors may require a reserve or rolling reserve to mitigate the risk associated with CBD transactions.

Considering integration and user experience

Evaluate the ease of integrating the payment processor with your existing eCommerce platform, website, or CBD POS system.

For example, KORONA POS, one of the best CBD POS systems, protects CBD shop owners from the frustration of payment processor shutdowns. KORONA POS is designed to cater to CBD businesses and offers processing agnostic integration.

This means you can choose any payment processor that works for you. If you aren’t sure what CBD payment processing to choose, we can help you find a payment processor that seamlessly integrates with our system so you can focus on running your business.

Ensure that the payment processor offers a seamless checkout experience for your customers, including mobile optimization and responsive design. Look for payment processors that provide detailed reporting and analytics, allowing you to track transactions, monitor sales, and identify trends.

Checking for additional services

Some payment processors may offer additional services like chargeback management, recurring billing, and international payment processing, which can benefit your business. Consider payment processors that provide merchant account services, allowing you to accept credit card payments directly without a third-party processor.

Consulting industry experts and peers

Contact industry experts, legal professionals, and other CBD businesses to gather insights and recommendations on reputable CBD payment processors. Join CBD industry associations or forums to connect with peers and learn from their experiences with different payment processors.

By thoroughly researching and evaluating CBD payment processors based on these factors, you can find a reliable partner that understands the nuances of the CBD industry and provides secure, compliant, and efficient payment processing solutions for your retail business.

Best CBD Payment Processors You Could Choose 


Processing fees: The Square CBD Program has fees that are different from standard processing fees. These fees apply to all transactions processed through Square, including non-CBD sales. Here’s a breakdown of the fees you can expect:

  • In-person transactions (tap, dip, or swipe): 3.5% + 10¢
  • Online transactions (card-not-present): 4.4% + 15¢
  • Recurring payments (card on file): 4.4% + 15¢
  • API and Invoice transactions: 3.8% + 30¢
  • ACH payments: 1.0%

Streamlined application process: Applying for the Square CBD Program is straightforward. You’ll need to provide basic information about your business:

  • Typical transaction volume
  • Refund policy details
  • Recent bank statements
  • Descriptions of your CBD products
  • Links to your online store and social media profiles
  • Certificates of Analysis (COAs) verifying the Delta-9 THC content of each product

Industry-leading compliance: Square prioritizes a secure and compliant environment for sellers and customers. Due to the evolving regulations surrounding CBD, they have a strict application process to ensure all products comply with federal and state laws. This includes prohibiting any claims that your CBD products can cure, treat, or alleviate specific health conditions.

Clearent by Xplor 

Services offered: Clearent offers a comprehensive suite of payment processing services tailored for CBD businesses. They provide secure and reliable credit card payment processing designed explicitly for the CBD industry. Clearent’s solutions cover eCommerce, mobile, in-app payment processing, recurring billing, and invoicing capabilities. Their services also include built-in tools for inventory management, marketing, and loyalty programs to streamline operations and enhance customer engagement. Clearent offers cash discounting and surcharge programs to boost profitability for CBD businesses, ensuring a competitive edge in the market.

Schedule a KORONA POS Demo Today

Speak with a product specialist and learn how KORONA POS can power your business needs.

CBD Payment Processing: Wrapping Up

Operating a CBD business comes with its own set of unique challenges, especially when it comes to payment processing.  Although payment processing options are still available for CBD retailers, there are only a few, like Clearent and Square. 

Research and evaluate fees, integration, compliance requirements, and consult industry experts. As regulations continue to evolve, it’s crucial for CBD businesses to stay updated and maintain compliance to mitigate risks and operate smoothly.

If you’re also looking for a POS system that caters to CBD businesses, you can try KORONA POS. It’s processing-agnostic, meaning it can integrate any payment processor. They can also help you choose your store’s ideal CBD payment processing provider. It’s a POS that also includes inventory management. Click below to learn how KORONA POS can help your business.

Frequently Asked Questions

1. What is CBD payment method?

CBD payment method refers to the way businesses that sell cannabidiol (CBD) products accept payments from their customers. Because CBD is derived from the cannabis plant, traditional payment processors may not allow CBD transactions.

2. What does CBD stand for?

CBD stands for cannabidiol, a compound found in the hemp plant. Unlike THC, CBD is non-psychoactive, meaning it doesn’t produce a “high”.

3. What is the best CBD payment gateway?

Finding the best CBD payment gateway depends on your specific needs and location. Due to federal restrictions on cannabis in the United States, many traditional payment processors don’t allow CBD transactions. Researching options that cater to high-risk industries is recommended.

4. Does PayPal process CBD?

No, PayPal currently does not process payments for CBD products.

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Written By

Mahougnon Martial Amoussou

Passionate about SEO and Content Marketing. Martial also writes about retail trends and tips for KORONA POS. He loves NBA games and is a big fan of the Golden State Warriors.