CBD Payment Processor – Is LumiPay The Answer?CBD Village
CBD Payment Processing In 2020
If you are searching for an effective way to sell CBD products online then there is a good chance that you are already quite familiar with cannabidiol and the fact that it is becoming increasingly popular in the health and wellness world.
CBD Oil & Payment Processors
CBD is being introduced into many online businesses and e-commerce stores. It isn’t any wonder, given that the industry is poised by 2025 to generate £12 billion in revenue.
Unlike almost every other cannabinoid, CBD is legal in the UK as long as it is derived from one of the 63 EU-approved strains of hemp. That has been true since 2017.
However, it is only in the last year we have seen a huge upsurge in the popularity, with more and more research papers and anecdotes claiming healing properties and medicinal benefits.
This has exponentially increased the number of owners of e-commerce businesses looking for payment gateways where CBD merchant processing is allowed.
To meet the consumer demand for CBD products like topical solutions, supplements, CBD capsules, and oils, the non-psychoactive cannabinoid is getting stocked by an increasing number of online e-commerce stores and brick-and-mortar shops.
However, if you plan to be involved in a high-risk sector such as this, it means you need to become aware of what is required to legally process CBD business transactions.
Payment Processors In The UK
Although legal in a majority of forms across most of the UK and EU, CBD is still a high-risk industry. Most regulations are still unclear and the government is still working on straightening out this industry’s regulatory framework.
It isn’t necessary to worry since as long as you are adequately prepared, you can avoid potential financial problems and be successful with your offline or online CBD store.
However, you cannot just ignore the fact that the strict regulation of CBD places all products that contain cannabinoids within a high-risk category. This results in many UK payment processors being hesitant to work with CBD businesses.
Shady manufacturers that just want to make money fast are ruining things for everyone else by discouraging payment processors from wanting to handle the online transactions of CBD sellers.
What is the solution to this problem? Locating a high-risk processor that is not afraid to provide you with a payment gateway so you conduct business the way that all low-risk companies are able to do.
The why is because this relatively new industry does tend to be prone to charge-backs and payment card fraud. Since it is an industry hovering in a grey legal area, there are few CBD payment processing services that are willing to take on the risks that are associated with these kinds of transactions.
Traditional online payment processors such as PayPal and Stripe are out of the question. Stripe will immediately turn your business down if you tell them youre selling CBD because they regulate based on US law, not UK law.
You might get away with it for a while on PayPal, but as soon as they discover the nature of your business youll likely find your account frozen, your money withheld and little chance for recourse.
Ultimately using PayPal will likely land you in very hot water and leave you out of pocket – not because it illegal but because of how messy processor regulations can be.
Is LumiPay The Answer?
The next problem youre likely to encounter is after finding a processor that will take high-risk payments is that they are limited in integration capabilities. No one wants to discover that they have to switch over their e-commerce website to a different platform to get a CBD payment processor integrated.
That can be very deflating and really time-consuming, especially after you have invested a lot of effort and money into perfecting how your online hemp or cannabis shop appears to consumers.
It is best to not use a CBD merchant processor that requires you use their platform. You should instead choose a company that allows you to seamlessly integrate their card processing system with a range of e-commerce software.
Companies offering those services are the ones that you will want to work with since they will have the ability to support you as your business continues to grow.
This brings us to our most recent discovery – LumiPay. LumiPay is a pretty new company, but after sending an enquiry (or two) to them, it seems like theyd be a good choice for CBD payment processing – at least for small/medium businesses.
Theyve got top-tier data security and lower rates than most of the companies weve considered – significantly lower than PayPal in particular. They also told us that they had started with the aim of helping CBD suppliers and resellers, so theyre as invested in the industry as we are.
A high percentage of CBD payment processors use API integration to operate. It is the most common type of payment gateway that is available.
Using API has the major benefit of you the business owner being able to monitor the payment gateway, and also provide you with insights into the way your e-commerce store looks from the perspective of the customer.
We did notice that LumiPay offer integration with all major development platforms like Shopify and WordPress.
What Does The Future Entail?
With the speed that things are currently progressing – cannabis legality spreading, CBD popularity rising – it stands to reason that the payment processing industry should also move along quickly enough.
However, because of the regulatory frameworks in place, and knowing how long it can take for governments and regulatory bodies to keep up with modern trends, it might not be as fast we could hope for.
However, with companies like LumiPay being approved and working for industries like ours, the future is looking at least a little brighter than it did at the beginning of the year.
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