High-Risk Payment Gateways for Cannabis Ecommerce

Not all processors can facilitate cannabis e-commerce. When vetting merchant processing companies, you need experience in the cannabis vertical, an inclination to support federally illegal products, and a history of ecommerce credit card processing success. The best providers provide features such as tokenization, the ability for recurring billing, and fraud detection functionality, along with popular shopping cart integrations like Shopify, WooCommerce, and even BigCommerce, with custom gateway integration should the need arise.

Payments must be compliant in this industry. A high-risk gateway will be fully PCI DSS compliant, as well as support tools that keep your business above board. Age verification, AVS (address verification service), and restricted product verifications are all essential in keeping your account in good standing. Merchant processing companies that work with the cannabis niche also pay attention to new laws and the ever-changing world of banking policies, so they can inform you and protect you.

Cannabis ecommerce has a higher risk of fraudulent measures. Stolen cards or synthetic identity fraud is common, especially when you’re selling more expensive items like concentrates or larger quantities of flower. A solid high-risk payment gateway comes equipped with real-time fraud monitoring tools, allowing merchants to report any suspicious actions and automatically reject potentially fraudulent sales. This active layer of protection helps minimize chargebacks and ensures your approval rates remain as high as possible.

When you’re in a high-risk vertical, losing folks at checkout means lost sales that you will not be able to recover. Payment gateways equipped for e-commerce credit card processing provide customizable checkouts for you to maintain branding and security. Things like card saves and one-click reorder, and mobile use options facilitate customer purchases more easily, which is essential within high-risk verticals that experience increased cart abandonment^[3].

With legalization across the globe, many cannabis e-commerce brands are expanding beyond their first markets. A pliable high-risk payment gateway should allow for multi-currency processing and relationships with acquiring banks across the globe. That means your United Kingdom, European, or Latin customers can easily pay without issue due to no geographical payment limitations^[4].

Cannabis e-commerce is more likely to experience chargebacks than other markets. Payment gateways equipped for high-risk situations have dashboards to help you track dispute history and allow you to respond to chargeback inquiries and raise a red flag to high-risk customers before any further issues occur. Payment processors must engage with merchant processing companies that offer you these features to protect your account from costly mistakes.

Many cannabis merchants utilize specific e-commerce tools or build-from-scratch solutions. Thus, your payment processing gateway either needs to have plug-and-play opportunities or adaptable APIs for easy integration into your existing tech stack. Some e-commerce credit card processing solutions even permit recurring orders or subscriptions, great for wellness CBD brands or businesses offering seasonal collections.

Many high-risk merchant accounts charge a higher price, but transparency is essential. Never work with processors that have undisclosed surcharges, holdbacks, or termination/penalty clauses. A merchant processing company that works with the industry will outline monthly service fees, per transaction processing fees, chargeback fees, and reserve fees up front so your cannabis business can appropriately budget and scale without fear of unexpected costs.

Since many federal banks desire to stay away from servicing this industry, many e-commerce opportunities seek international merchant accounts or payment process workaround systems through cryptocurrency. Various high-risk payment gateways accept ACH transfers, stablecoins, or can find loopholes for gift card transactions. While this may not be ideal, these opportunities help cash flow without as much regulatory burden as conventional credit card networks.

Not every cannabis e-commerce opportunity sells directly to consumers. Many wholesaling partners sell goods to other dispensaries, head shops, and retail locations. E-commerce credit card processing must include high transaction limits for bulk ordering, invoicing capabilities, and ease of tax-exempt purchases. Therefore, seeking processors that understand this limited-access niche in B2B cannabis ecommerce is helpful for wholesale ordering features, invoicing capabilities, and custom payment links.

Q: Why can’t I use Stripe or PayPal for my cannabis ecommerce?

A: Stripe, PayPal, and your normal processors do not allow cannabis ecommerce due to federal laws and the avoidance of risk. You need a high-risk payment gateway that will underwrite your type of business^[5].

Q: Are cannabis credit card payments legal in the U.S.?

A: It’s complicated. While cannabis may be legal on the state level, the refusal of many banks and credit unions to extend the same lending relationships with active federal legislation means that there are licensed, specific merchant processing companies that work with the law to offer cannabis compliant credit options.

Q: How do I get approved for a cannabis payment gateway?

A: You’ll need to provide documentation, including your business license, Articles of Incorporation, vendor documentation and product descriptions. Each payment processor has different requirements and approval timelines, but generally, high-risk verticals take one to two weeks.

Q: What fees can I expect from cannabis merchant accounts?

A: Fees are generally higher than standard ecommerce—for every transaction anticipate 4-8%. Monthly gateway fees, chargeback fees and rolling reserves may also be required by the processor.

Q: Can I have a cannabis site on Shopify or WooCommerce?

A: You can, but you may also need a custom gateway integration. Certain merchant service providers do not allow cannabis plugins on merchant sites, so ensure you select a partner who specializes in e-commerce credit card processing for high-risk verticals.

Q: What if my chargeback rate is too high?

A: Your account can be shut down by your merchant payment processor if your chargeback rate consistently exceeds their threshold for acceptance (usually 1%). This will not happen if you align yourself with merchant processing companies that will alert you when on the verge, offer chargeback dispute services and fraud prevention options before it becomes an issue.