If you’re selling hemp products, you’ve likely felt the sting of a sudden account freeze from a big-name processor. It’s a common, frustrating story. One day you’re making sales, the next you’re locked out of your funds with little explanation. This happens because mainstream providers see your business as “high-risk” and aren’t equipped to handle the industry’s specific compliance needs. The solution isn’t to hide what you sell; it’s to find a partner who understands your market. This guide is your complete roadmap to securing a stable merchant account for hemp, so you can stop worrying about surprise shutdowns and focus on growing your business with confidence.
Key Takeaways
- Partner with a High-Risk Specialist: Mainstream processors will shut down your account due to the hemp industry’s risk classification. A specialized partner provides the stability you need to accept payments without the constant threat of frozen funds or sudden termination.
- Look Beyond Basic Processing: The right processor acts as a line of defense for your revenue. Prioritize partners that offer essential tools like proactive chargeback management and advanced fraud prevention to protect your business from disputes and financial loss.
- Prepare Your Paperwork Before Applying: A smooth approval process depends on having your documents ready. Gather your business licenses, recent bank statements, and—most importantly—third-party Certificates of Analysis (COAs) for every product to prove your compliance from the start.
What Is a Hemp Merchant Account?
Think of a hemp merchant account as a specialized business account that gives you the power to accept credit and debit card payments from your customers. While that might sound like any standard merchant account, it’s designed specifically for the unique needs of businesses selling hemp and CBD products. Because the industry is still new and operates in a complex legal environment, traditional payment processors and banks often classify hemp businesses as “high-risk.” This label can make it incredibly difficult to get approved for a standard account through providers like Stripe or PayPal.
A hemp merchant account is offered by a payment processor that understands the industry’s rules and is willing to work with businesses that others turn away. It acts as the essential link between your customer’s bank, the major credit card networks (like Visa and Mastercard), and your business bank account. Without it, you’re cut off from the most common way customers pay for products online and in-store. This isn’t just about convenience; it’s about survival and growth. Having a dedicated account ensures your payment processing is stable, secure, and compliant, so you can focus on running your business instead of worrying about whether your payment system will be shut down without warning.
How It Works
Even though the 2018 Farm Bill made hemp-derived products with less than 0.3% THC federally legal, many financial institutions remain cautious. The lingering association with marijuana, combined with a patchwork of state-level regulations, makes traditional banks and processors nervous about the perceived legal and financial risks. This is where a high-risk payment processor comes in. They have established relationships with banks that are comfortable with the hemp industry. When a customer makes a purchase on your site, the processor securely routes the transaction through these channels, ensuring the payment is approved and the funds are deposited into your account. It’s a tailored solution for a non-traditional industry.
Why Your Hemp Business Needs One
Simply put, you can’t build a sustainable business without a reliable way to accept payments. Trying to use a standard payment processor for your hemp business is a huge gamble. These providers have strict terms of service that often prohibit CBD and hemp sales. If they discover what you’re selling—and they usually do—they can freeze your funds and terminate your account overnight, leaving you unable to conduct business. A dedicated hemp merchant account provides the stability you need to operate without that constant threat. It legitimizes your business, protects your cash flow, and allows you to offer the seamless checkout experience your customers expect. It’s a foundational tool for long-term success.
Why Is It Hard to Get a Hemp Merchant Account?
If you’ve tried to set up payment processing for your hemp business, you’ve likely hit a wall. It’s frustrating to have a great product but get turned down by mainstream providers like Stripe or PayPal. This isn’t a reflection on your business; the financial world simply labels the hemp industry as “high-risk.” This means traditional banks see a greater potential for financial complications, from chargebacks to evolving regulations. As a result, many refuse to work with hemp businesses to avoid the hassle. This is why you need a specialized merchant account from a provider who understands the industry’s unique challenges.
The “High-Risk” Label
So, what makes hemp “high-risk” to financial institutions? It’s mainly regulatory uncertainty. Even though hemp is legal, its close relationship with the federally illegal cannabis industry makes banks nervous. They see a landscape of perceived legal risks and potential compliance headaches. This caution extends to payment processors, who worry about high chargeback rates if regulations shift. For a standard processor, the potential profit isn’t worth the risk, so they often issue a blanket denial.
Complex State and Federal Rules
The 2018 Farm Bill legalized hemp-derived products federally, but with a key condition: the product must contain less than 0.3% THC. This rule alone creates a massive compliance burden. On top of that, state laws vary dramatically, creating a confusing legal patchwork across the country. This lack of clear, uniform regulation makes many banks and payment processors hesitant. They see an industry with unclear federal and state rules and decide it’s safer to stay away. A specialized high-risk processor, however, has the expertise to work within these complex legal frameworks.
Common Myths vs. Reality
A common myth is that because hemp products are legal, getting a merchant account will be easy. The reality is that the “high-risk” label creates hurdles that can catch you by surprise, like having your account suddenly frozen or shut down. The real risks of a standard CBD merchant account include everything from higher fees to the threat of losing your payment processing overnight. This is why partnering with a processor that specializes in the hemp industry isn’t just a good idea—it’s a foundational step for building a stable, scalable business.
Top Payment Processors for Hemp Businesses
Finding the right payment processor can feel like searching for a needle in a haystack, but it’s one of the most critical decisions you’ll make for your hemp business. The right partner doesn’t just handle transactions; they provide stability, security, and the expertise needed to operate smoothly in a high-risk industry. A great processor understands the specific legal and financial hurdles you face and offers tools designed to protect your revenue and support your growth. They’ll help you manage chargebacks, stay compliant with shifting regulations, and integrate seamlessly with the sales platforms you already use.
Think of your payment processor as a core part of your business infrastructure. Without a reliable one, you risk account holds, freezes, or even sudden termination, which can bring your sales to a grinding halt. To help you make an informed choice, I’ve put together a list of some of the top payment processors that have a proven track record of working with hemp and CBD businesses. Each one offers a unique set of features, so you can find the one that best aligns with your specific business model, whether you’re selling exclusively online, in a brick-and-mortar store, or both.
Borderfree Payments
At Borderfree Payments, we specialize in providing stable and secure payment solutions for businesses in high-risk sectors, including the hemp and CBD industry. We understand that you need more than just a standard merchant account; you need a true partner who gets the complexities of your market. Our approach is built on creating customized payment infrastructures that address your specific challenges head-on. We equip you with advanced fraud prevention tools to protect your transactions and offer expert guidance on regulatory compliance to ensure your business operates on solid ground. Our goal is to remove the payment barriers that can hold you back, allowing you to focus on growing your brand with confidence.
PaymentCloud
PaymentCloud has built a strong reputation for being a go-to processor for high-risk merchants, and they are particularly welcoming to the CBD and hemp community. One of their standout features is the free guidance they offer to help you navigate the approval process, which can be a huge weight off your shoulders. They work to tailor their services to meet the specific needs of CBD sellers, ensuring your setup is fully compliant with all current industry regulations. This focus makes them a reliable option for businesses looking for a processor that truly understands the nuances of the hemp market and is committed to getting you approved and processing smoothly.
National Processing
If you’re looking for a processor that combines competitive fees with robust support, National Processing is an excellent choice. They are known for offering custom pricing plans, which can help you find a rate structure that fits your sales volume and budget. A major advantage is their set of tools designed to prevent chargebacks—a common headache for any high-risk business. Merchants often praise their strong customer support and flexible options for mobile payments, making them a great fit for businesses that sell at markets or events in addition to their online or physical stores. Their focus on affordability and service makes them a strong contender.
PayKings
For hemp businesses that are heavily focused on e-commerce, PayKings is a processor worth serious consideration. They are especially well-suited for online stores and have deep experience with popular platforms like Shopify. They often use an “interchange-plus” pricing model, which can offer greater transparency and potentially lower costs for high-volume sellers. PayKings also places a strong emphasis on chargeback protection and is known for its fast account approval times. In an industry where getting your merchant account up and running quickly is crucial, their efficient onboarding process can be a significant advantage, helping you start accepting payments without unnecessary delays.
Bankcard International
Bankcard International is a versatile option that caters well to medium-to-large hemp businesses, whether they operate online, in-person, or both. They are a great fit if you’re looking for a long-term partnership and require dedicated, around-the-clock support. They offer some of the most popular point-of-sale (POS) systems, making them ideal for retail locations. Beyond standard credit card processing, they also handle eChecks and ACH payments, giving your customers more ways to pay. This flexibility, combined with their 24/7 customer support, makes them a solid choice for established businesses that need a comprehensive and reliable payment solution to support their continued growth.
Understanding the Costs of a Hemp Merchant Account
When you’re running a business, the last thing you want is a surprise on your monthly statement. Getting a clear picture of the costs associated with your hemp merchant account from the start helps you manage your cash flow and protect your profits. While pricing structures can seem complex, they usually boil down to a few key areas. Let’s walk through what you can expect to pay, so you can find a partner with transparent and fair pricing.
Standard Processing Fees
Every time a customer buys something from you, a small portion of that sale goes to your payment processor. These are your standard processing fees, and they are the most common cost you’ll encounter. For most businesses, these merchant account fees fall somewhere between 1.5% and 3.5% of each transaction. The exact rate you get will depend on your business’s sales volume, transaction history, and the payment processor you choose. As a hemp business, your rates might lean toward the higher end of this range due to the industry’s risk profile, but a good processor will explain exactly how they determined your rate.
Monthly and Setup Charges
Beyond the per-transaction fees, you’ll likely see a few other recurring charges. Monthly fees are pretty standard across the board; think of them as an account maintenance or service fee. Setup charges, however, are less common. While most businesses should be wary of providers that ask for a setup fee, it’s something you might encounter in the high-risk space. This fee often covers the additional work required for underwriting and onboarding a hemp business. If a processor includes a setup fee, make sure they can justify what it covers and that it’s a one-time charge.
Hidden Costs to Watch For
This is where things can get tricky if you’re not careful. Some processors use complicated statements to obscure extra charges that eat into your revenue. One of the most common is the chargeback fee, which is a penalty you pay whenever a customer disputes a transaction. These typically cost between $15 and $25 per incident and can add up quickly. You should also keep an eye out for vague or “creative” processor fees with names you don’t recognize. A trustworthy partner will provide a clear, easy-to-read statement and be ready to explain every single line item.
Staying Compliant: Legal Rules for Hemp Payments
Selling hemp products means you’re operating in a complex legal space, and staying on the right side of the law is non-negotiable for keeping your payment processing active. While the 2018 Farm Bill opened the door for the industry, the rules are far from simple. Think of compliance less as a single finish line and more as a series of checkpoints you constantly have to clear. For your business, this means understanding the nuances of THC content, state-specific laws, and the ever-shifting regulatory landscape. Failing to keep up is one of the fastest ways to lose your merchant account, which is why a firm grasp on these legal requirements is essential for protecting your business.
Meeting THC Content Requirements
The most fundamental rule in the hemp industry revolves around one number: 0.3%. To be sold legally at the federal level, your hemp-derived products must contain less than 0.3% Delta-9 THC by dry weight. This is the core distinction that separates legal hemp from marijuana under the Controlled Substances Act. For your payment processor, this isn’t just a guideline—it’s a hard-and-fast requirement. You’ll need to provide current, third-party Certificates of Analysis (COAs) for all your products to prove they meet this standard. Keeping these documents organized and readily available is crucial for both your application and for maintaining your account long-term.
State-by-State Differences
Just because your products are federally compliant doesn’t mean you can sell them everywhere. Each state has its own set of rules for hemp and CBD, creating a complicated patchwork of regulations across the country. For example, one state might allow the sale of CBD-infused edibles and beverages, while a neighboring state may prohibit them entirely. This regulatory uncertainty is a primary reason why many payment processors classify hemp as high-risk. As a merchant, you are responsible for understanding and adhering to the specific hemp production laws in every state where you ship products.
The Ever-Changing Legal Landscape
The rules governing the hemp industry are constantly in flux. The 2018 Farm Bill was a landmark piece of legislation, but it was just the beginning. Federal and state agencies continue to refine their guidance, and new laws are introduced regularly. This constant evolution makes many traditional banks and payment processors nervous, as they struggle to keep up. For your business, this means staying informed is part of the job. Partnering with a payment processor that specializes in the hemp industry is a huge advantage, as they are dedicated to monitoring these changes and can help you adapt to ensure your business remains compliant.
Must-Have Features in a Hemp Payment Processor
Choosing a payment processor is about more than just getting approved. You need a partner with the right tools to protect your revenue and help you grow. The best processors for high-risk industries offer specialized features designed for the unique challenges you face. When comparing options, make sure these three non-negotiables are on your checklist. They can make all the difference between simply surviving and thriving in this competitive market.
Smart Chargeback Management
Chargebacks are a frustrating reality, but they can be especially damaging in the hemp industry. Because the sector is considered high-risk, too many chargebacks can put your merchant account in jeopardy. A proactive chargeback management plan isn’t just a good idea—it’s often a requirement for approval. Look for a processor that offers more than basic reporting. You need a system with real-time alerts that notify you of disputes immediately, giving you time to respond. The best partners also provide tools and support to help you fight illegitimate chargebacks, protecting your revenue and keeping your account in good standing.
Strong Fraud Protection
As a hemp business, you’re a prime target for fraudulent transactions. Without the right defenses, you could face significant losses and a spike in chargebacks. Your payment processor should be your first line of defense. Look for one that offers a multi-layered approach to fraud prevention. This includes standard tools like Address Verification System (AVS) and CVV checks, plus advanced technology that analyzes transaction patterns in real-time to flag suspicious activity. This proactive monitoring helps you stop fraudulent orders before they’re processed, saving you from the headache and financial hit of a chargeback down the line.
Seamless Integrations and Support
Your payment processor should make your life easier, not harder. It needs to integrate smoothly with the tools you already use to run your business. Whether you sell online or in a physical store, your processor should offer compatible payment devices and simple integrations for a frictionless checkout experience. It’s also important to find a partner that understands the diversity of the hemp market. Your processor should be equipped to handle sales for a wide range of products—from oils and edibles to topicals and pet products—giving you the flexibility to expand your offerings without switching providers.
Your Application Checklist: What You’ll Need
Applying for a hemp merchant account is much more manageable when you know what to expect. The key is preparation. Payment processors look at hemp businesses closely, so having your paperwork in order shows them you’re a professional and compliant operator. A complete application not only speeds up approval but also builds trust with your payment partner. Before you fill out a single form, use this checklist to gather everything you’ll need.
Business Licenses and Certificates
First up, you need to prove your business is legitimate and legally registered. This is the baseline for any merchant account application. You’ll need to provide copies of your official business license, articles of incorporation, and your federal Employer Identification Number (EIN) documentation. For hemp businesses, it goes a step further. Processors will need to see any state-issued licenses that permit you to grow, process, or sell hemp-derived products. These documents are non-negotiable, as they demonstrate you’re operating within the legal framework of your state and are a critical part of their due diligence.
Bank Statements and Financials
Next, you’ll need to give the processor a look into your business’s financial health. This helps them understand your sales volume, cash flow, and overall stability. Be prepared to submit three to six months of recent business bank statements showing consistent activity. You will also likely need to provide a voided check or an official bank letter. This simply verifies that the bank account you want your funds deposited into is valid and belongs to your business. It’s a standard security measure that protects both you and the processor from errors or fraud.
Product and THC Testing Docs
This is where the specifics of the hemp industry really come into play. To get approved, you must prove your products are legal. The most important documents here are your Certificates of Analysis (COAs) from a third-party lab. Every product you sell needs a corresponding COA that clearly shows its cannabinoid profile and, most importantly, that its Delta-9 THC concentration is at or below the federal limit of 0.3%. These lab results are your proof of compliance. Keeping them organized and up-to-date is essential, as processors will review them carefully.
How to Choose the Right Partner
Selecting a payment processor is more than just a line item on your to-do list; it’s one of the most critical business decisions you’ll make. The right partner will feel like an extension of your team—someone who gets the unique challenges of the hemp industry and is invested in your long-term success. The wrong one, however, can lead to frozen funds, surprise fees, and a whole lot of stress that pulls you away from what you do best. When you’re in a high-risk industry, this choice becomes even more important. You’re not just looking for someone to process transactions; you’re looking for a stable foundation for your revenue.
As you compare your options, focus on three key areas: the transparency of their pricing, their experience within the hemp industry, and the fairness of their contract terms. A processor that excels in these areas is more likely to provide the reliable service you need to grow your business without constantly looking over your shoulder. Taking the time to thoroughly vet your potential partners now will save you from major headaches down the road.
Look for Clear, Honest Pricing
When you’re running a business, the last thing you need is a surprise bill. Unfortunately, some payment processors that cater to high-risk industries are known for murky pricing structures. It’s essential to find a partner who is upfront and transparent about their costs. Before you sign anything, ask for a complete breakdown of their fee structure. Don’t be afraid to dig into the details. Ask about transaction rates, monthly fees, chargeback penalties, and any other potential costs. A trustworthy partner will have no problem explaining every line item and ensuring you understand exactly what you’re paying for. This clarity is the first sign of a healthy partnership.
Vet Their Industry Expertise
The hemp industry operates under a unique and often confusing set of rules. That’s why you need a payment processor who already knows the landscape. Many traditional banks and generic processors are hesitant to work with hemp businesses because they don’t understand the complex regulations and see the industry as a legal risk. A partner with deep industry expertise will be prepared to handle these complexities, offering more reliable service and reducing the chances of your account being suddenly shut down. Look for a provider with a proven track record of supporting businesses just like yours. They’ll be your best advocate in the payments world.
Review Contract Terms and Stability
The legal status of hemp and CBD products can feel like it’s constantly shifting, which adds a layer of risk to your business operations. This makes it incredibly important to partner with a stable provider and to read your contract carefully. A sudden account freeze or closure can be devastating, so you want a partner with a solid operational history who isn’t easily spooked by regulatory changes. Scrutinize the contract for terms related to account termination, fund holds, and liability. A good partner will offer fair, clear terms that protect your business instead of trapping you in a risky agreement. This is your financial lifeline, so make sure it’s secure.
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Frequently Asked Questions
Why can’t I just use a standard processor like Stripe or PayPal for my hemp business? While it might seem like the easiest route, using a standard processor is a huge gamble. Their terms of service almost always prohibit the sale of hemp and CBD products. Even if your application slips through initially, their review systems will eventually flag your account. When that happens, they can freeze your funds and shut you down without warning, leaving your business in a terrible position. A dedicated hemp merchant account is designed for stability, so you never have to worry about that happening.
Will my processing fees be higher with a hemp merchant account? It’s true that rates for high-risk accounts can be slightly higher than what a low-risk business might pay. Think of it less as a penalty and more as an investment in security and specialized service. The processor takes on more risk and does more work to manage compliance in the hemp industry. Those slightly higher fees cover the cost of that expertise, ensuring your payment processing remains stable and your revenue is protected from sudden account closures.
What’s the biggest mistake I can make when applying for an account? The most common mistake is being unprepared or trying to hide the nature of your business. Submitting an application with incomplete information, outdated lab reports, or vague product descriptions is a major red flag for underwriters. It signals that you might not be serious about compliance. The best approach is to be completely transparent and have all your documents—like your business license and Certificates of Analysis—organized and ready to go from the start.
How long does the approval process usually take? The timeline can vary, but it largely depends on how prepared you are. If you have all your documentation in order and submit a complete application, you could be approved in as little as a few business days. However, if there are missing documents or questions about your products, the back-and-forth can extend the process to a week or two. The key to a fast approval is having everything on the application checklist ready before you begin.
My products are 100% legal. Why do I still need to provide so much documentation? Even though your products are federally legal, the financial world still views the entire hemp industry with caution. Your payment processor has to prove to its partner banks that your business is fully compliant and a reliable partner. All that documentation—especially your third-party lab reports—serves as concrete evidence. It’s how the processor builds a strong case on your behalf to secure a stable, long-term merchant account for your business.
