The subscription box trend is one that’s taken countless industries by storm—and CBD is no different. From CBD oil and tinctures to gummies and skin care/wellness products, this monthly recurring order option provides customer convenience while simultaneously ensuring consistent delivery. This means company representatives don’t have to waste time figuring out their stock or running around the store to fill orders as frequently as in-store purchases. While subscriptions provide a reliable revenue stream for merchants, card networks and banks assess CBD as high-risk. As a merchant in a high-risk vertical, recurring billing isn’t as straightforward. But with a knowledgeable CBD merchant account at hand, all cash flow issues can be avoided for a sound long-term future of your business come 2025. Without it, CBD merchants risk disruption in cash flow and their long-term stability.
Why Is the Subscription Model So Popular with CBD?
CBD subscription boxes are popular options based on the ease and convenience of the customer while simultaneously providing stability for the merchant. While customers get what they need on a recurring basis, merchants are essentially guaranteed recurring revenue. For high-risk industries, however, the profit potential lies in less customer churn (allowing companies to maximize lifetime value) and less running around and planning (as subscriptions make it easy for merchants to know what products will be secured on a monthly basis). Subscriptions also help in forecasting demand levels and accurate inventory management. While these benefits would allow any industry to thrive under this model, any entrepreneur needs reliable payment processing for security. Without it, declines, frozen accounts or chargeback fees can lead to assumptions that compliance requirements are not appropriately being handled.
Why Is CBD Recurring Billing Considered High-Risk for Payment Processing?
Payment processing with high-risk merchants is one of the most complicated aspects of overall operations for CBD companies. Payment processors assume added risk when offering their services since state and federal regulations differ depending on the country/where the consumer is located; fraudulent activity is more common with CBD; and higher levels of chargebacks occur based on buyer remorse or product perception (whether it be mislabeling or adverse side effects)[1]. Subscriptions compound these problems further, as recurring payments are more easily challenged if customers forget about them or are dissatisfied with their purchases. In addition, high-risk merchants are more likely to face rolling reserves, higher fees and longer settlement periods. Without a reliable merchant account dedicated to helping high-risk sponsors, subscription models become untenable.
Why Does A CBD Merchant Account Matter Most?
A CBD merchant account is exactly what it sounds like—it allows a merchant the opportunity to process payments through credit cards while alleviating concerns of operating within a high-risk vertical[2]. These merchant accounts enable recurring billing solutions (to an extent), chargebacks to be reviewed (along with chargeback care) and compliance assistance and security features. When these strategies are woven together, stability becomes much more tenable; without it, accounts may be terminated with little warning, leaving these merchants scrambling to assess what’s next. Ideally, a processor gets engaged—one that works well with the CBD community specifically—since this vertical is under consistent scrutiny from regulators for transgressions unrelated to legitimate products (illegal use and claims) of mislabeled products.
Why Customer Experience Matters Most For Recurring Billing Success
When it comes to why recurring billing is successful for both customer and merchant value, customer experience reigns supreme. Should there be complicated e-receipts that show up in spam folders; failure to let customers easily cancel subscriptions; or unexpected (and expensive) charges without appeal (for simple mistakes), customers will chargeback instead. But when transactions are clear, reliable and provided based on trust and transparency for everyone involved—less churn/disputes will occur—immediate revenue is great but brand loyalty is most important—especially in a crowded market that still maintains stigma against it[3].
The Future of Recurring Billing Payment Processing Solutions In CBD
The future of recurring billing payment processing solutions within CBD hold more opportunities as secure tools, flexible and intelligent solutions. AI fraud solutions will stop bad transactions before they emerge; tokenization will connect directly to blockchain-based solutions compliant for recurring billing; meanwhile, regulators are likely to deliver harsher penalties toward unclear opportunity vendors, making compliance tools that much more useful[4]. Beyond making advanced recurring billing solutions more tenable come 2025, CBD merchants themselves are better positioned in what evolves through ecommerce worlds down the line.
Six Ways to Help Recurring Billing with CBD Subscription Boxes For Success
Smart Dunning Management
With dunning tools automated and evaluating previously failed attempts through declined/expired cards, involuntary churn can reduce revenue lost without frustrating customers who legitimately want to stay on board.
Transparent Communication
Less confusion surrounding billing cycles or charges means less chance of disputes. Customers who know what to expect are less likely to chargeback over concerns should they receive an unexpected charge.
Secure Tokenization
Tokenization services mean less payment processing inconsistencies because PCI DSS Compliance outlines how cardholder data storage is required—this means recurring billing will be much more easy in compliance considerations.
Flexible Payment Options
If customers can pay through ACH; digital wallet options or even stablecoins (cryptocurrency that has designed value attached) then credit card rails are avoided. Retention can be much more seamless if there's no immediate failed payment from prepaid methods that run out.
Proactive Compliance Integration
In-house oversight forces responsibility on the merchant's end which aligns them with consumer protection laws and card network rules so there's less chance of processor punishment.
Chargeback Mitigation Tools
Chargebacks mean lost revenue without appeal options learned after the fact; specialized tools that get merchants involved early on reduce the likelihood of chargebacks reducing recurring revenue.
FAQ
Q: Why is CBD considered high risk by payment processors?
A: Payments processors work with non-high-risk verticals with decreased chargebacks and unscrupulous activity; simultaneous government/CBD regulations are considered risky.
Q: What is a CBD merchant account?
A: A CBD merchant account allows recognized payment processing efforts combined with those familiar with reduced risk processing options.
Q: How do recurring billing solutions help CBD subscriptions?
A: Recurring billing creates predictable environments; if solutions fail, it’s likely due to improper compliance over misunderstood terms[5].
Q: What challenges do CBD merchants face with recurring billing?
A: Payment failure; regulatory oversight; payments that don’t make sense and unattractive appeal options.
Q: What trends will shape the future of recurring billing solutions with subscription boxes?
A: AI-driven fraud tools; tokenization-based compliance solutions; alternatives like ACH or stablecoins should play a larger role moving forward.
Sources
- Federal Reserve. “Payments Systems and Compliance Standards.” Accessed August 2025.
- Visa. “Payment Security and High-Risk Merchant Guidance.” Accessed August 2025.
- International Monetary Fund. “Emerging Payment Trends.” Accessed August 2025.
- Bank for International Settlements. “Innovation in Retail and High-Risk Payments.” Accessed August 2025.
- PCI Security Standards Council. “PCI DSS in High-Risk Payment Processing.” Accessed August 2025.
