CBD products are becoming increasingly popular in the health and fitness industry and the natural wellness industry. CBD is derived from certain cannabis plants, which are also the source of marijuana. Unlike marijuana, however, CBD does not produce a psychoactive effect, and instead, it has been shown to provide a mild relaxing impact on the body. CBD can treat various conditions such as epilepsy, body pain, stress, insomnia, and anxiety. The appropriate dosage of CBD depends on the condition being treated.
Types of CBD
There are two main types of plants when it comes to CBD — marijuana, and hemp. Marijuana plants tend to have a higher THC content, while hemp plants are more affluent in CBD.
CBD has many potential health benefits, so it is becoming famous worldwide. More and more businesses are selling CBD products as demand continues to grow.
Some of the most common health benefits of CBD include reducing anxiety, relieving pain, and improving sleep quality. CBD may also help to reduce inflammation and promote a healthy appetite.
The Growth of CBD Companies
CBD products have become increasingly popular in recent years, as scientists have discovered various medical and health benefits of CBD. Companies selling CBD tablets, gummies, edibles, lotion, creams, etc., have sprung up rapidly, and the global CBD industry is projected to pass $90 billion by 2026.
Most CBD products are legal to produce and sell due to changing laws in many countries. Laws vary based on every country, but almost all European countries have deemed CBD legal, provided it has a THC concentration of less than 0.3%. The rise in popularity and legality of CBD products has created opportunities for entrepreneurs and investors alike.
CBD products offer a wide range of potential health benefits, including relief from anxiety, pain, and inflammation. CBD products are also non-addictive and have minimal side effects, making them an appealing option for natural alternatives to traditional medications.
With the rapid expansion of the CBD industry, it is essential to do your research before investing in any CBD company. Before making any final decisions, look into a company’s financial stability, product quality, and customer service record.
The Challenges of the CBD Industry
1. Payment processing is another issue for the CBD industry. Complicated regulations and various laws regarding CBD products make it a high-risk business.
2. Many traditional banks and financial institutions are reluctant to work with CBD companies due to the legal risks. This makes it difficult for CBD businesses to access the capital and banking services they need to grow and operate effectively.
3. Because of their association with cannabis, CBD products face stringent regulation by many government agencies. This includes the U.S. Food and Drug Administration (FDA), which has not yet approved CBD products for medical use.
4. The CBD industry is still relatively new, so standardization and quality control are lacking. This can make it difficult for consumers to know exactly what they get when purchasing CBD products.
Despite these challenges, the CBD industry is multiplying and is expected to continue to do so in the years to come. Hopefully, with more research and development, some of these hurdles can be overcome, making it easier for people to access the benefits of CBD products.
Why do Payment Processors deem CBD business high risk?
There are several reasons why Payment Processors may deem CBD business high risk. Some common causes include:
A new business with negligible transactions: companies that are new and have very few transactions can be considered high risk by Payment Processors. This is because there is more potential for fraud and chargebacks, and the Processor may not have sufficient information to assess the risk properly.
Suppose a business has been dropped by a payment service provider before. It can be challenging to get approved for another account if a business has had its performance with a Payment Processor terminated in the past. The Processor will view the company as at high risk of fraud or chargebacks.
If a business experiences a high number of chargebacks: If a business has a history of chargebacks, this can be seen as an indicator of risk by Payment Processors. This suggests that the company is not providing good customer service or its products or services are not as described.
A business with a poor credit score: Payment Processors may view enterprises with poor credit scores as high risk. This is because there is a greater chance that the company will default on its payments or be unable to pay back funds that are owed to customers.
A business selling high-value services or products: Businesses selling high-value services or products can be considered high risk by Payment Processors. This is because there is more potential for fraud and chargebacks, and the Processor may not have sufficient information to assess the risk properly.
These are just some of why a business may be considered high risk by a Payment Processor. If your business is deemed high risk, it is essential to shop around for a Processor willing to work with you. You may also need to provide additional information or documentation to prove that your business is not as high risk as to the Processor initially thought.
Kryptova for High-Risk Merchants
At Kryptova, we understand that high-risk merchants often have difficulty finding reliable payment processing solutions. We’re proud to offer our merchant account services to businesses in high-risk industries. We know that when other providers turn their back, you still need a way to accept payments from your customers — and we’re here to help.
With our robust, complete-scale payment processing solutions, you can easily accept credit cards and crypto payments with just a single integration. We’ll work with you to find the best solution for your business, so you can keep accepting payments and growing your business — no matter what industry you’re in. Contact us today to learn more about our high-risk merchant services.
