Merchants have difficulties in finding a payment processor that accepts CBD
The industry sees itself confronted with extorsively high payment rates due to the high-risk classification of the business
CBD merchants experience troubles in entering new markets with an incomplete payment method portfolio due to a limited number of payment processors
CBD (cannabidiol) is an extract taken from marijuana or industrial hemp. Compared to marijuana, CBD contains THC only at a fraction. However, most banks and processors still refuse to board such companies, even though it is non-psychoactive and legally accepted in several European countries. They fear reputational risks and financial disadvantages in getting to close to the seemingly shady aspects of marijuana.
We at DIMOCO are aware of these topics, but we are still openminded for this industry. That is why we invested time intensely looking into the subject to understand the industry and the various business models thereof. Our investigations also included deep diving into national provisions and requirements. We found that CBD is a commercially legal product with THC at an overall rate of less than 0,2%, and can be offered in numerous countries throughout the EEA.
DIMOCO Payment Services accepts CBD merchants thus ending the difficult path for them trying to source a payment service provider. Merchants find a partner with us that is sharing legal knowledge to boost the business safely without fearing any technical or legal interruptions.
The close relationship with marijuana causes the majority of the acquiring banks to classify the industry as a high-risk business. Moreover, if this is not enough, the few providers in the market might take advantage of their unique position to charge extra fees. In the end, no good news for merchants.
From historical experience in working with well-known CBD merchants, we at DIMOCO came to a completely different conclusion. Fraud and chargebacks associated with this industry are low on average, and DIMOCO’s real-time fraud monitoring and Risk Management mitigate these issues to negligible background noise.
To make it short, we do not offer high-risk rates right away! We consult with our clients to adjust our services meaningful and maximise their unique individual benefits. We also take the time to understand the business model to keep transaction fees as low as possible.
Every country is different, and the same applies to the online payment preferences of CBD customers. Due to the limited number of payment providers and thus a limited portfolio of payment methods, merchants cannot meet customer expectations to select their most appropriate payment option from a variety of payment methods. As a result, merchants are suffering from shopping cart abandonment with no chance to convert website visitors to buying customers.
DIMOCO Payment Services offers more than 100 payment methods, from major players such as MasterCard and Visa to local and country-specific alternative payment options, to capture the maximum number of buying customers. We know the markets and advice on how to maximize revenue with the right combination of national and international payment methods. This enables a boost of cross-border conversion and ensures that the merchants’ customers can pay quickly and reliably.
DIMOCO Payment Services is a payment institution under PSD2, licensed in the EEA and supervised by the Austrian Financial Market Authority (FMA). As a payment service provider, DIMOCO Payment Services processes credit card payments and a vast amount of alternative payment methods for eCommerce merchants worldwide. The company offers merchants the security of a regulated payment institution, tailor-made industry-specific payment solutions, innovative risk management tools, and customized revenue-generating services.
Interested in learning more about our competitive rates for your webshop? Get in touch with us.
Head of Corporate Communications
DIMOCO Corporate Headquarters
Tel: +43 1 33 66 888-2059