The booming CBD market has opened up countless opportunities for ecommerce entrepreneurs and wellness brands alike. Yet despite the growing consumer demand and evolving regulatory acceptance, many CBD merchants still face one major hurdle—obtaining a reliable, secure, and compliant merchant account. Since CBD is considered high risk due to federal regulations, inconsistent banking policies, and chargeback exposure, not every payment processor is equipped—or willing—to support your business. In this guide, we’ll break down how to get a merchant account for CBD oil, what to look for in a credit card processing service, and how to avoid common mistakes that can delay approvals or get your account shut down. Understanding your options is key to processing payments smoothly while staying within legal and industry guidelines.
Why CBD Businesses Are Classified as High Risk
CBD merchants fall into the high-risk category for a number of reasons, despite the 2018 Farm Bill legalizing hemp-derived CBD at the federal level. Financial institutions remain cautious due to the unclear regulatory landscape, the risk of chargebacks, and compliance with state-by-state rules[1]. This puts CBD sellers in the same category as adult services, supplements, and other regulated industries. Being high risk doesn’t make your business illegitimate, but it does mean you need a specialized approach when selecting a credit card processing service. The risk classification affects everything from underwriting to fees, which is why working with experienced providers is critical for success.
What Is a Credit Card Processing Service?
A credit card processing service is a third-party company that enables businesses to accept card payments from customers. These services act as intermediaries between your website, acquiring banks, and card networks like Visa and Mastercard. For high-risk industries like CBD, the processor also plays a regulatory role by ensuring that your checkout flow, descriptors, terms, and return policies align with compliance standards[2]. A high-risk processor will not only help you accept payments but also reduce chargebacks, monitor for suspicious activity, and integrate fraud prevention tools tailored to the cannabis-adjacent market. Their role is central to keeping your operation running smoothly.
Key Features to Look For in a Credit Card Processing Service
When choosing a credit card processing service for your CBD business, there are specific features that go beyond traditional ecommerce needs. Look for solutions that offer customizable fraud filters, dynamic descriptors, robust reporting, and seamless integration with ecommerce platforms. A good processor will also support recurring billing if you plan to launch a subscription service. Mobile POS capabilities, transparent pricing, and 24/7 support are also valuable for businesses selling both online and in person. Don’t settle for a provider that treats you like a liability—find one that sees your potential.
Why Payment Nerds Is the Best Choice for CBD Payment Processing
Among the many providers that claim to support CBD businesses, Payment Nerds stands out for its tailored support, transparent pricing, and fast onboarding. We specialize in high-risk merchant accounts and have direct relationships with banks that understand the nuances of selling hemp-derived products. Our team assists with documentation, integration, and long-term compliance—so you can focus on growing your business. Whether you’re launching your first Shopify CBD store or scaling your direct-to-consumer wellness brand, Payment Nerds provides tools and insights to help you stay competitive and secure.
Compliance Considerations for CBD Merchants
Compliance is at the heart of any successful CBD merchant account. Your processor will expect your business to comply with PCI DSS (for card security), avoid making unsubstantiated medical claims, and clearly outline return/refund policies. If you’re selling ingestible products, be prepared to show COAs for each SKU. Depending on your jurisdiction, you may also need permits or licenses that confirm your eligibility to sell hemp-derived goods[3]. Staying transparent and informed will prevent compliance issues that could lead to chargebacks, disputes, or account closures.
How to Get a Merchant Account for CBD Oil
Understand Your Legal Standing
Before applying for a merchant account, verify that your products comply with federal and state laws. This includes THC thresholds, product labeling, and licensing. Processors will require certificates of analysis (COAs) and product descriptions to ensure compliance. Some states restrict certain types of CBD products, so it’s important to know your boundaries.
Choose a Specialized Processor
Generic processors like Stripe or Square often shut down CBD merchants without warning. Instead, work with a credit card processing service that explicitly supports CBD businesses. These companies offer custom underwriting and have relationships with acquiring banks that understand your niche. A few offer pre-approval services and even help you set up chargeback protection.
Prepare Documentation in Advance
Gather your business license, COAs, refund and privacy policies, and marketing materials before you apply. High-risk processors conduct a thorough underwriting process, and missing paperwork slows things down. Showing that you’re organized can increase your chances of approval and get your account live faster.
Avoid Mislabeled Products
Products that are incorrectly labeled or make medical claims can result in instant rejection. Avoid stating that your CBD products “cure” anything and focus on wellness and balance instead. Review all product descriptions and ad copy before submitting your site for review.
Use Transparent Checkout Pages
Processors evaluate how you present your products to customers, especially at checkout. Be sure your cart displays the full price, shipping info, terms of service, and contact details. Hosted payment pages and embedded iframes from PCI-compliant vendors can also help reduce your compliance burden.
Stay Ready for Ongoing Reviews
High-risk merchants are often reviewed periodically to ensure ongoing compliance. Keep your paperwork updated and respond quickly to any inquiries from your processor. Staying proactive helps avoid account holds or shutdowns.
How to Avoid Getting Shut Down
Be Honest During Application
Misrepresenting your business category or product lineup is a fast track to account termination. Be transparent from the start, even if it means paying slightly higher fees. Full disclosure builds trust with your processor and ensures the right underwriting process.
Monitor Chargeback Ratios
Too many chargebacks can lead to fees, account holds, or closure. Set up alerts to monitor disputes and respond to chargebacks promptly. Consider tools like chargeback alerts or pre-dispute resolution services offered by your provider.
Review Marketing Practices
Some ad networks ban CBD promotions, which leads merchants to use workaround strategies. Avoid misleading content or redirecting users to non-compliant pages. Your processor may flag this as deceptive and terminate your account.
Maintain Updated COAs
Certificates of Analysis are often requested during audits. Make sure each batch has a current COA from a certified lab and keep them readily accessible. Many processors now require batch tracking systems as well.
Secure Your Checkout Process
Ensure your site uses SSL, has proper PCI compliance, and includes a visible privacy policy. Hosted checkout pages that don’t touch card data can reduce your risk and PCI scope. Secure infrastructure builds processor confidence.
Partner With an Expert
Work with consultants or agencies familiar with high-risk verticals. They can help audit your application, improve documentation, and connect you with reliable processors. A good partner pays for themselves by reducing risk and saving time.
FAQ
Q: Why is it difficult to get a merchant account for CBD oil?
A: CBD is still considered high risk by many banks and processors due to evolving laws and regulatory uncertainty[4]. Even hemp-derived CBD can trigger shutdowns if the provider doesn’t specialize in this category. High chargeback rates and compliance complexity add to the challenge. That’s why working with a provider like Payment Nerds is essential.
Q: Can I use a regular processor like PayPal or Stripe?
A: No, most mainstream processors prohibit CBD transactions and may freeze your funds without warning. Using a high-risk specialist is the safest path forward. They offer the infrastructure and support needed for CBD payments. Avoid general-purpose tools unless explicitly approved for your use case.
Q: How long does it take to get approved?
A: Approval typically takes 3 to 10 business days, depending on documentation and business history. Having all compliance materials ready can accelerate the process. Choose a processor that walks you through each step to avoid unnecessary delays. Payment Nerds often shortens onboarding through pre-vetting.
Q: Are there monthly minimums or reserve requirements?
A: Most high-risk processors require reserves—usually 5–10% of monthly volume held for 3–6 months. Some may also charge monthly fees or minimums. These terms protect processors from chargebacks and fraud. Ask about reserve release schedules before signing.
Q: What documents do I need to apply?
A: You’ll need a business license, bank account info, product details, COAs, and a copy of your return and privacy policies[5]. Some providers may ask for previous processing statements. Having everything organized upfront speeds up approval.
Q: What makes Payment Nerds different?
A: Payment Nerds offers hands-on service, fast approvals, and long-term support for CBD merchants. Our relationships with banks and understanding of cannabis-adjacent industries ensure a smoother setup. We also provide tools to help manage risk and reduce chargebacks. Our experience means fewer surprises and more peace of mind.
Conclusion
Securing a merchant account for CBD oil doesn’t have to be a frustrating experience. By understanding the unique challenges of high-risk payment processing and partnering with the right credit card processing service, you can confidently grow your brand in a compliant and secure environment. From compliance and documentation to fraud protection and reliable support, the right processor becomes a partner in your success. Payment Nerds makes it easier to navigate the complexity of CBD payment processing, helping you avoid shutdowns, protect your revenue, and deliver peace of mind to your customers. If you’re serious about long-term growth, it’s time to work with experts who know your business inside and out.
Sources
- U.S. Food and Drug Administration. “FDA Regulation of Cannabis and Cannabis-Derived Products.” Accessed July 2025.
- National Hemp Association. “Hemp-CBD Legalization Timeline.” Accessed July 2025.
- Forbes. “CBD Payments Still Face Challenges.” Accessed July 2025.
- PCI Security Standards Council. “PCI Compliance Guidelines for High-Risk Merchants.” Accessed July 2025.
- Green Entrepreneur. “How to Build a Compliant CBD Ecommerce Business.” Accessed July 2025.
