European CBD Merchant Accounts

CBD: Why High-Risk?

In today’s global ecommerce market, CBD sales offer a wealth of opportunities to online merchants, but they also present some obstacles. Developments in medical science, changing international legal regulations, and commercial risk-to-reward calculations are in the midst of a three-way tug-of-war with CBD and other cannabinoids at the center.

CBD in its various forms is legal for all uses in some jurisdictions, regulated as a prescription medication or banned outright in others, and currently holds a legal status somewhere in between throughout much of Europe.

The legal landscape surrounding CBD is in a state of flux, making it difficult to predict the product’s legal status in many countries or regions even a few years in the future. As such, merchants who wish to offer products containing CBD often encounter difficulty finding a payment processor willing to take the risk of working with businesses that sell CBD products.

What is CBD?

CBD, or cannabidiol, is one of many chemical compounds derived from the hemp plant. It does not have a psychoactive effect, and preliminary clinical research has indicated that it has potential for use in the treatment of a variety of medical conditions. However, in large part due to anti-drug laws, further research on CBD has been slow, leaving the compound in an uncomfortably minimal space in which it isn’t precisely a medicine, a health supplement, or a food. Once merchants clear the hurdle of how CBD can be marketed, they must still traverse the shifting net of regulations regarding its sale, and a misstep can result in serious legal trouble.

High-Risk Payment Processing

When a product or industry exists in a changing regulatory climate or exists on different sides of the law across jurisdictional borders, generally the only financial institutions willing to offer payment processing services to merchants in that industry are those who offer high-risk merchant accounts. A high-risk merchant account serves the same function as a standard merchant account, but generally entails higher fees and additional restrictions that serve to insulate the payment processor from the increased financial liability that comes with working with merchants in certain industries.

Merchants will need the following documents

Obtaining a Merchant Account

Durango Merchant Services works with numerous financial institutions across Europe and worldwide, allowing us to tailor a merchant account to the specific needs of your individual business. When applying for your CBD merchant account, you should have on hand your last six months’ worth of processing history from your previous merchant account provider (if applicable), and a solid estimate of your monthly sales volume. You should also be able to produce certifications that every CBD product you sell is in compliance with regulations, is derived from industrial hemp, and contains 0.2% or less THC. You should also draft and sign a letter confirming that all of your CBD products are in compliance with all statutory regulations for your jurisdiction and the European Union. Your website should make it clear that you only sell or ship to EU countries in which CBD products are legal. On your website you should not offer any subscription services, and nowhere on your website should you make any health claims whatsoever about the effects of CBD. Every CBD product you sell must be labeled in compliance with all food supplement regulations and should display a complete and accurate ingredient list.

What to Expect: Rates and Restrictions

Naturally, any transaction attempted by parties in jurisdictions where CBD products are illegal will automatically be blocked, for your protection as well as ours. Outside of that common-sense restriction, your merchant account may have a few restrictions or requirements that might not appear in the agreement for a standard merchant account. You may be required to meet a certain minimum (or maximum) sales volume threshold, either in general or for the first few months after being approved for your merchant account. You may also be required to maintain a rolling reserve – a kind of escrow account in which newly deposited funds are held for a period of time as insurance against chargebacks or other issues. These are standard features for high-risk merchant accounts across numerous industries. You may also be charged fees per chargeback or per refund, but if you ever have any questions about your merchant account fees, your account representative will happily answer any questions.

No Extra Fees

At Durango Merchant Services, we won’t charge you extra fees just because we can, and we won’t try to sneak any hidden fees past you. Your merchant account will be specifically designed for your business in response to your needs, because Durango believes that every business is unique and one size (or account) does not necessarily fit all merchants. Even if you’re a startup without any real transaction history, we can still help you get the merchant account you need to get your business up and growing.