Holy Cow! CBD merchants can legally get a merchant account to accept credit cards!!
If you are a CBD merchant this is likely one of the most exciting things you’ve heard lately. It also means you are probably getting bombarded with salesman vying for your business and making low price promises meant to undercut the salesman just before them. You know I’m right!
The problem is that rate structures are confusing and misleading and it is difficult for merchants to truly understand what they are signing up for. To make matters worse many salesmen will say anything, even resort to lying, to get your account.
With such a new, and might I say exciting, development in the CBD industry right now we think it is incredibly important for merchants to be able to make an informed decision when applying for their new merchant account for CBD payments. Everybody wants your business right now but who do you want to do business with? Retail CBD credit card processing is a reality!
We have spent a lot of time on the topic of merchant account rates and what we believe is the fairest way to bill our clients. We have said time and again that the only pricing method that any merchant should accept is Interchange Plus pricing. It is truly the only transparent form of pricing an account. There is no way to hide fees, like can be done easily with a tiered pricing structure. And while the billing for merchant accounts can be very confusing, Interchange Plus is the only form where a merchant can actually figure out what they are being charged.
And so, I find myself here, dipping into it once again for CBD merchants. CBD merchants have been dealing with a “guilt by association” situation when it comes to access to banking and merchant services just like the legal cannabis businesses of America. They have been stuck in this legal grey area making it difficult to get a merchant account for processing CBD payments and due to this, there is a lot of contradicting information out there.
Until now there has not been a fully legal and transparent solution for acquiring a merchant account for CBD merchants. Meaning the majority of the time a merchant account was being acquired either through a high risk offshore account, a miscoded application, or through an aggregate account where sometimes dozens of merchants are all lumped into one merchant account together. They have not been able to get their own merchant account. Once the bank found out there was an illegal merchant in the account the whole account would be shut down, leaving all of the merchants involved without a way to process payments.
CBD merchants have also fallen victim to high rates and even price gouging due to the sheer fact that there just weren’t many options out there. But we find that the hardest part about quoting rates to businesses is the lack of continuity in pricing structures from the various merchant service providers as well as a general lack of education surrounding the industry as a whole.
It is not your job as a merchant to understand payment processing, the Interchange, or banking regulation. That is our job. However, some basic understanding will help you get the most fair and transparent pricing and a merchant account for CBD payment processing that you are not willing to switch every other month.
How to get CBD credit card processing, the right way.
I don’t know how many times when we quote our customers the rates for their account we hear “Oh that’s way too high! The other guy quoted me this rate!” The thing is the “other guy’s” rate is by no means low, it is deceiving. There are a lot of salesmen who will tell a client they can give them a rate like 3.5% and the merchant is ecstatic. But what they are NOT disclosing is that isn’t the full rate. They fail to explain things like the rate being 3.5% in addition to Interchange. Interchange is passed through from the Visa/MasterCard Network and everyone has to pay it. So this merchant is actually paying 3.5% plus the Interchange rate (which varies for every card type) plus per-transaction fees, plus any monthly charges associated with the account. By the time all is said and done the merchant ends up paying 7%. The problem is that the merchant thinks their rate will be 3.5%, which is not a true effective rate. The only true way to find out what your merchant services cost is to calculate your effective rate. Which means dividing gross processing fees by gross sales. But this allows the salesman to say that they are only charging the 3.5%- the rest is passed through. At the end of the day, your merchant account is costing a lot more than you expected.
When we quote Interchange Plus pricing we will quote our rate, called basis points, that is then added to the Interchange price (for each card) plus a per-transaction fee. While it may seem like this is a flat rate, the total rate will differ for each different card because the Interchange rate is different for each the varying card types. Then we will calculate your overall effective rate based on past sales volume and because our effective rate includes the Interchange fees it is truly giving you the most accurate idea of what your merchant account will cost you. Our rates almost always turn out to be lower than the quote the merchant thought sounded so great. This is why it is so important to calculate the effective rate.
At Bankcard Brokers we are dedicated to providing our clients with not only the fairest pricing but also the most transparent pricing. You should know exactly what you are paying for. We follow that up with outstanding customer service because after all, you are our customer. We strive to stay abreast of the rules and laws of our industry so that we can offer our clients only the best products for the success of their business. We hold ourselves to a higher standard, are genuinely interested in the success of our clients and strive to forge lifelong business relationships with our clients. Now that we can legally provide our CBD merchants with transparent domestic credit card merchant accounts we want to make sure that you are making an educated decision and we hope that you will consider opening a merchant account with us. Come to the Bankcard Brokers side and experience the difference!