Cannabidiol (CBD) has exploded onto the tobacco and vape scene, with 60 percent of Americans reporting that they’ve tried (and enjoyed) a CBD product.
As CBD continues gaining traction, offering your customers these exciting new product lines can be a major opportunity for your small business! You’ll be able to attract new shoppers, make more sales, and build customer loyalty as your neighborhood’s number one provider of CBD.
There’s just one small catch: Selling CBD can cause your vape shop to be labeled a high-risk retailer by payment processing providers — meaning that you need a specialized solution for CBD payment processing.
In this blog, we’ll share everything you need to know about CBD payment processing and how to hop on this profitable new trend.
What Is Payment Processing?
Before we explore the world of selling CBD, let’s review payment processing in general. Payment processing is how your small business accepts debit card, credit card, and contactless payments from customers.
When a customer taps or swipes their card or device at checkout, your payment processing provider validates and authorizes the transaction, then facilitates the transfer of funds from their bank to yours.
What Is High-Risk Payment Processing?
High-risk payment processing is a specialized solution tailored to the needs of retailers who are prone to financial complications like chargebacks and fraud, or businesses operating in industries that are subject to regulatory scrutiny or legal challenges.
We’ll cover the key differences between high-risk and standard payment processing later in this blog, but for now, let’s discuss why your smoke or vape shop might need high-risk payment processing.
Why Do CBD Sellers Need High-Risk Payment Processing?
Smoke and vape shops — specifically those carrying products like CBD, delta-8, and kratom — often fall into the high-risk category because of the tightly regulated nature of the tobacco industry.
The legal landscape of tobacco, vape, and CBD products is constantly evolving, and payment processors see a greater risk associated with businesses carrying these products.
If you plan to sell products like CBD that are new to the market and still being heavily regulated, you might need high-risk payment processing.
What You Need To Know About CBD Payment Processing
Now that we’ve covered why your smoke or vape shop might need a specialty payment processing solution, here’s exactly what you need to know about CBD payment processing before making the leap.
1. Key Differences Between CBD and Standard Payment Processing
While CBD and standard payment processing are fundamentally the same service, there are some important differences that you should know.
High-risk payment processing for CBD retailers often comes with higher processing fees. That means that for every transaction in your smoke or vape shop, you’ll pay a slightly higher fee in order to process the payment.
In addition to higher processing fees, many high-risk payment processors have special requirements for their merchants, including:
- A more in-depth application process
- Cash reserve requirements
- Volume caps on the total amount of transactions you’re able to process
- Higher chargeback fees
These factors will differ from provider to provider, so as you’re evaluating your options for CBD payment processing, make sure to ask about their requirements and fees.
2. The Sales-Boosting Benefits of CBD Payment Processing
While CBD payment processing might come with higher fees and extra requirements, it’s still a huge asset for your smoke or vape shop. High-risk processing opens new doors for your business, expanding the range of products that you’re able to offer your customers.
You’ll have the opportunity to be the first smoke shop in your neighborhood to offer new products as they first arrive on the market hassle-free, giving you a major boost in customer satisfaction and sales.
3. Why You Need a POS System With Integrated CBD Payment Processing
Now that we’ve covered what CBD payment processing is, how it’s different from standard payment processing, and how this specialty service can give your business a boost, let’s talk about how to start selling CBD in your smoke shop!
Your best bet is to choose a point of sale (POS) solution with fully integrated, high-risk payment processing. Payment processing that’s integrated into your POS system often allows you to get the best deal on your processing — and you’ll enjoy the added benefits of faster, more secure transactions.
If you’re looking for a powerful POS system with CBD payment processing capabilities, then check out Cigars POS. Cigars POS is a POS system designed specifically for tobacco, smoke, and vape shops, and it has all the tools you need to effectively manage inventory, provide top-notch customer service, and boost your bottom line.
As an all-in-one solution, Cigars POS can also help with all your CBD payment processing needs, empowering you to offer the widest range of products to your customers.
Conquer CBD Payment Processing With Cigars POS
CBD payment processing offers you the chance to expand your product offerings to include new and popular products like CBD, delta-8, and kratom, helping you attract new customers to your smoke shop and make more sales.
If you’re ready to put CBD payment processing to work for your small business, then look no further than Cigars POS. Schedule a personalized demo today to see Cigars POS in action and get expert insights into the landscape of CBD payment processing.
