Saturday, May 28, 2022

Payment Processing in the World of CBD

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Although the Farm Bill legalized hemp federally in late 2018, CBD companies are feeling frustrated because of the lack of support and options of taking payments via credit cards.

Large merchant processing companies such as Visa and Elavon are ending their services for reasons that are debatable.

Below, you will read some insights offered by Pure Hermosa who was affected by the abrupt termination of their services, and Zodaka, a business that has risen to the task of taking payments for CBD companies.

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“When we launched end of March sales were strong and rolling along really nicely until the end of May, which for a start-up using only Organic Marketing that is fantastic. But then on May 31st at midnight Elavon pulled out and we were down. Even though we had 6 weeks notice and rallied to get a new processor aligned, the few who would work with CBD companies were inundated. There were also many approaching that had insanely high processing fees, we had two stops and starts with companies that we spent days doing the paperwork and waited weeks to get approved by and then they literally disappeared. They obviously couldn’t deliver. We heard this was happening CBD-industry-wide. It truly seemed bleak, we then found GreenBox and applied but heard we would have to move our online store from Shopify to WooComm. So we spend thousands doing so, spending money we needed to be spending on marketing! So now we were not making any money and spending thousands to move platforms which at this early growth stage could have been dire. But happily on June 27th we opened again with GreenBox and thankfully they DO integrate with Shopify. BUT sales are slower as we work hard to get our momentum and groove back! Other companies in the meantime have launched and there’s more competition and noise in the marketplace so it is like starting over… but we already have some loyal customers and some great marketing strategies and testimonial campaigns launching that we are hoping will help regain our momentum. – Susan Agostinelli, President + CEO, Pure Hermosa

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“The lack of payment in CBD is absolutely stifling the industry. It’s unfortunate that just as CBD is starting to gain mainstream notoriety the ability to purchase it legally has diminished. I’m not sure we’ve had a product since prohibition where the public perception of was so out-of-step with the legal framework. Luckily, there are companies like Zodaka offering legitimate, secure, reliable payment processing to new CBD merchants. Zodaka’s solution is a huge win for the industry because we offer a direct bank-to-bank payment option that doesn’t require sketchy offshore accounts or massive financial reserves. The industry needs to standardize if this growth is going to continue, and utilizing 100% legal, compliant, domestic payment services is a cornerstone of CBD’s development.” – Carson O’Connell, Marketing Director, Zodaka.

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