The CBD sector is one of the fastest growing and demanding industries worldwide. Projections indicate that the CBD market will clock $20 billion in sales by 2024. The surface has only been scratched on the earning potential of CBD, but the hemp business presents notable and unique challenges. Understanding these factors will help drive your CBD business towards tremendous growth.
Minimizing Downtime With Stable Bank Contracts
Hemp banking presents numerous challenges that may be detrimental to your CBD business and make partnering with banks while in the CBD business difficult. For example, laws differ in every state. This means that the differences between federal and state laws can also be a risk to your business and to the financial institution.
Banking institutions require high-risk assessments to ensure you’re dealing with legalized products. Once legality is determined, there’s still considerable stigma and risk-aversion to hemp-related businesses. Be sure to choose a merchant services partner who will provide adequate bank redundancy to prevent downtime and business disruption caused by terminated relationships. Stability of services is critically important.
Staying in Compliance With Industry-Specific Support
Numerous laws have been implemented to govern the sale and consumption of CBD products, as well as the payment processing requirements surrounding those transactions. CBD regulations are quickly evolving and business operators must keep in touch with these changes.
When you’re operating in a high-risk space like CBD and hemp, it’s important to ensure that your operational partners are familiar with the specific compliance needs (and subsequent hurdles) for your sector including relevant certifications and regulatory training. Otherwise, you could end up facing serious penalties or struggling to manage compliance requirements as laws continue to change.
Mitigating Fraud and Chargebacks Plus Utilizing Real-Time Reporting
Mitigating fraudulent chargebacks involves a set of industry best practices that help safeguard all the stakeholders in the system. This is due to increased defrauders initiating malicious transactions or stealing information.
CBD businesses are considered particularly high risk, not only because of special compliance needs but because many transactions are online and international. The best approach is securing every transaction with end-to-end encryption and customizable fraud detection parameters. Such measures ensure that criminals can’t access or manipulate card information. Real-time alerts empower you to act quickly when fraud is suspected and ultimately protect your business’s bottom line.
Valmar Merchant Services gives our customers a level of comfort, clarity, and peace of mind unrivaled in payment processing–even the “high-risk” ones our competitors won’t touch–with no downtime or disruptions. Our experts have certifications in industry-specific verticals such as CBD and hemp, as well as risk and compliance, and in the overall payment space – and we’re constantly sharpening our skills. If you have more questions, contact us – we’re here to help!