Banking Needs of Online CBD Businesses

What do CBD Businesses Need from their Bank?

Just like other eCommerce companies, online CBD businesses need banking services so they can pay suppliers; pay platforms like Facebook and Google used for traffic generation; pay for website creation, maintenance and operation; pay employees; office expenses; utilities, etc. CBD businesses will also need financial services to receive funds directly from customers who have bought CBD products; they need a way to accept online credit card payments to a merchant account and a corporate account to receive and hold revenues.

Financial Service Options for Online CBD Product Businesses

As with any online business CBD eCommerce businesses need to establish financial infrastructure to accepting online payments and make payments to suppliers.

The Financial Services and Online CBD Business Will Need Include:

• Corporate bank account
• Digital emoney account/EMI account
• Corporate debit card
• eWallet (like PayPal or Skrill)

Financial Solutions for CBD Companies in Europe

One of the best options is for CBD businesses to get all of the above-mentioned financial services from one Electronic Money Institute (EMI). EMI’s offer a full-service solution where you can receive and send funds; make transactions; have an international business debit card; conduct currency exchange; use ATM machines and your online CBD business can even make international wire transfers using its own IBAN. EMIs in Europe offer some of the best financial service solutions for CBD businesses.

Read more about CBD oil ecommerce

How to Open Offshore CBD Merchant Account

Legal uncertainties, compliance issues, high volume sales, risk of fraud, misunderstanding of the industry and changing regulations, make CBD merchant accounts high risk. Finding an on-shore CBD merchant account provider is difficult and so many CBD businesses turn to offshore CBD merchant account specifically designed for the CBD industry. These CBD merchant account providers take into consideration the legal issues, chargeback risks and reputational risks of the CBD industry. Among the requirements for opening an offshore CBD merchant account are financial details; company ownership details; a detailed explanation of your business operations; business licenses and compliance documents. 

Where to Open High-Risk Merchant Accounts for CBD

Among the most popular high-risk merchant accounts for CBD businesses are PaymentCloud which can give personal service to companies selling topical CBD products and Durango, for eCommerce CBD merchants in the UK and EU. Want to open business bank account in UK ? click here. Other options are Easy Pay Direct; smbglobal for high-volume CBD sales and Square which is an affordable choice for low-volume CBD trade. These are all reputed merchant account providers but you might feel more comfortable with a company that specializes in CBD merchant accounts. CBD merchant account providers include Paytriot, based in the UK; Total Processing; Emerchantbroker; Allied Payment; PayKings and Fortune Payments. Remember, some providers might work with companies that sell specific CBD products only, like topicals or edibles. Other high-risk merchant accounts for CBD may be available only for companies marketing in a specific jurisdiction. 

Offshore CBD Payment Processing

If a CBD company cannot gain approval from a payment processing provider in their own country, or if they have reasons not to want services from local providers then they can turn to offshore CBD payment processing providers. Due to federal laws in the US many banks are unwilling to open an account for CBD companies. With offshore CBD payment processing, CBD companies will still have to go through a complex application process. When applying for offshore CBD payment processing services you will need to provide supporting documents to prove your business is legitimate. For example, proof of your company registration and a website URL where the company name and address are listed. Offshore payment processors will check that you meet the legal requirements for marketing in your target jurisdictions. 

CBD High-Risk Merchant Accounts

CBD is classified as a high-risk industry which means that CBD merchant account providers will usually charge higher fees, require a rolling reserve and verification that you are operating in jurisdictions where your product is legal. Before opening a CBD high-risk merchant account for your company, providers will want proof that your CBD product is safe, legal and legitimate. A CBD high-risk merchant account should provide you with chargeback management and alerts; fraud prevention and protection; multiple payment options; processing for multiple currencies as well as the standard merchant account services. Once you have your account approved it is important to maintain good credit history; good sales volume; reduce chargebacks or dispute chargebacks successfully and avoid any legal issues in order to remain in good standing with your CBD high-risk merchant account provider.

How to Open CBD Business Account

The first task is to find a bank willing to open an account for your CBD businesses. As CBD has only been legal for a few years; regulations are unclear in many jurisdictions and it is considered a high-risk industry. Many financial institutions shy away from CBD business accounts. Some banks are willing to open a business account for companies so long as the words “cannabis”, “hemp” or “CBD” don’t appear on your website or URL. Some banks welcome only CBD companies that work with a particular CBD product – edibles, topicals etc. CBD companies needing a business account should seek out institutions where they are fully accepted, and where the bank has prior experience dealing with the CBD industry.  Once you have found a financial institution willing to offer you a CBD business account the application process begins. You will have to fill in a detailed application form and provide a number of supporting documents showing that you and your business is legitimate. 

CBD Business Bank Account in Europe

The number of banks and financial institutions in Europe that work with CBD clients is extremely limited. CBD laws vary between European countries and some CBD products like skincare or edibles are legal in some European countries while illegal in others. European banks have to be sure that your company will only supply CBD products to countries where they meet the legal requirements. The ever-changing CBD laws, uncertainty about the industry, potential for fraud and the high volume of transactions in this industry make banks consider CBD high risk. When applying for a CBD business bank account in Europe you need to have all of your compliance records in order, KYC, AML, business license, financial history records, personal ID and credit history as well as a clear outline of your business plan, where you aim to sell and precisely what CBD products your company sells. Some of the best banking options for CBD business bank accounts in Europe are online-only, cross-border banks and EMIs.