Do You Need a CBD Payment Processor for Your WooCommerce Store?

WooCommerce is one of the most popular options for quickly turning a WordPress website into a fully functional eCommerce platform. But there are restrictions on what can be sold via Woocommerce using their payment integrations and hosting services. These restrictions include the sale of CBD and hemp-derived products. WooCommerce has stated they are continuing to monitor the situation and may make changes to this policy in the future.

But as for now, payments for CBD and hemp-derived products are not allowed via their integrated payment processor and hosted sites. For those who want to sell these products, you will need your own payment processor and hosting outside of WooCommerce.

WooCommerce CBD Policy

WooCommerce does not allow the acceptance of payments for CBD and hemp-derived products on sites hosted with WordPress.com. But the good news is that this doesn’t mean the products can not be sold on a WooCommerce-enabled website.

You can host, sell, and ship CBD products, but you will simply need to use a separate payment processor or merchant account and hosting service.

A merchant account is a type of business account that allows access to a payment gateway so that businesses can accept credit cards and other forms of electronic payment.
WooCommerce uses its own default payment gateway and merchant account, but this account does not allow the sale of CBD. Hosting for WooCommerce sites is handled by Automattic, a U.S. company. Certain laws regarding the assistance of CBD sales are why they must have this restriction.

It’s important to note that this does not include hemp clothing. However, if you sell hemp clothing in addition to CBD products, then the restriction still applies.

Using WooCommerce for Your Online CBD Store

So, yes, you can still use WooCommerce for your online CBD store. The restrictions are with your payment provider and hosting. As well as the version of WooCommerce you must use.
This means that WooCommerce can still be a great option for those looking to enter the CBD market. This is especially true if you already have experience with WooCommerce and don’t want to learn an entirely new platform to develop on.

The difference is you will be using the open-source version of WooCommerce and it will be hosted on your own server or web hosting account. Once installed, the open-source version of Woocommerce will be identical to the hosted version that comes with WordPress.com hosted sites.

The features that sellers enjoy with WooCommerce are all present in the open-source version you host yourself, so there is little difference when it comes to actually building your store and customizing it to your liking.

Requirements to Sell CBD on WooCommerce

Once you decide to use WooCommerce to sell CBD on your own hosted site, there are a few key requirements you have to keep in mind to do so.

Hosting

To begin, you will need a hosting service. WooCommerce stores are normally hosted by WordPress.com. This won’t work for a CBD online store, so you’ll need to find a compatible host.

Many hosting companies will allow CBD stores on their servers, but some do not. It’s important to determine whether or not the host you choose allows CBD sales before setting up your site.
When choosing a host, you’ll also want to make sure it can handle the type of website you plan on building. This means having the bandwidth and data usage capabilities that will allow your site to run without interruption.

Next, you’ll need to decide if you want a managed server or an unmanaged server. Managed servers are maintained by the hosting company. All software comes preinstalled and most requests for changes need to be done with the host’s support department.

An unmanaged server allows for more freedom, but you have to maintain the software that is installed on it. For advanced users, this can be a great option. For users who are not experienced with hosting, a managed account is generally the best option.

Merchant Account

You will also need a merchant account to handle your electronic payments via the WooCommerce store. A merchant account is a type of business account that allows your business to access a payment gateway for accepting credit and debit cards.

CBD products are sometimes classified as “high-risk”. In credit card processing, high-risk industries generally mean that there is a higher chargeback rate or other issues that make them more costly to process.

A CBD payment processor, ecspayments.com, for example, specializes in high-risk transactions. High-risk payment processors can make it much easier to obtain a CBD merchant account. Finding a payment processor that meets the needs of a high-risk business in the CBD industry can offer processing solutions that wooCommerce does not offer.

Hand putting cash inside a piggy bank

Bank Account

Some banks may not allow businesses that sell CBD products. This means that the financial institution that you do choose for your banking must allow CBD businesses.

If you are already with a bank, ask them if CBD businesses are allowed under their policies. If you are in the process of finding a bank for your business, make sure to ask if CBD businesses are allowed.

Don’t try to hide this fact or ignore this fact when obtaining a bank account as it could cause substantial problems later on if it is detected. It could even result in your funds being unavailable for a certain period of time depending on how the bank wants to handle the situation.

CBD Products

The CBD products you sell must meet certain requirements for you to be able to legally offer them.

The CBD products you sell must be derived from industrial hemp. They must also contain less than .3% THC. These are federal guidelines so that the products fall under schedule 1 definitions.

Different states all have their own guidelines as well and these are changing frequently. In some states, CBD is fully legal while in others it is conditionally legal.

All CBD products you purchase from wholesalers to resell must also be FDA-approved. This means you must buy your products for reselling from an accredited and licensed producer that follows all federal and state guidelines for manufacturing.

WooCommerce CBD Limitations

WooCommerce is an open-source piece of software, so when hosted on your own servers, there are no limitations to what you can sell.

The only limitations when you are hosting the WooCommerce software yourself will come down to your hosting company and your merchant account used to accept payments. Whatever restrictions those two services have in place are the ones you will have to abide by.

If you use a hosting company that allows CBD sales and a trusted high-risk payment process like ECS Payments, then you can sell CBD products using WooCommerce with no issues.

Choosing a Payment Processor to Sell CBD with WooCommerce

Choosing the best payment processor for CBD is an important step when creating your store.
A payment processor is how you will accept payments from customers, so it must work flawlessly and fit your business perfectly.

Below are a few key areas to pay attention to when shopping for payment processors for CBD.

Merchant Account Fees

All payment processors will charge a fee per transaction. This fee is based on several factors including your sales volume as well as what you’re selling.

But not all processors charge the same fees. It’s important to find the best fees for your type of processing. Paying a higher fee will quickly add up to large sums of money over the lifetime of the business. It may also make it harder to compete in markets where prices are highly competitive.

Lower fees allow you to sell for lower prices, giving you a competitive advantage in some markets.

Fees are not only tied to transactions though. There may be other fees to compare such as monthly fees and minimum volume requirements that also impact the fee structure.
Make sure to take all of these into account when determining the total cost of payment processing. Only looking at the per transaction fee may result in you not getting the best deal

Woman paying for clothes with her credit card

High-Risk and Niche Products

Certain products and services are deemed as high-risk by credit card companies and therefore by the payment processors that accept payments.

Due to the nature of CBD sales, you need a payment processor that allows this type of transaction. You also need a payment processor that has experience in this area.

CBD payment processor ECS Payments helps clients deal with high-risk transactions and CBD payment processing. They can help guide you through the process and help you secure a merchant account for selling CBD products via WooCommerce.

Reliability

Any payment processor needs to be extremely reliable. Downtime or other problems means you can’t accept money from customers, and that’s a problem for any business.

Support

A payment processor also needs to have superior support so you can get answers whenever you need them.

Accepting payments is a core aspect of your business, so any issue you may be having in this area needs to be addressed quickly.

Look for support options that match how you like to work. For example, if you prefer speaking to someone on the phone, then prioritize phone support that is 24/7. Others may prefer email support as their primary method of contact.

Deposits

Another key area to look into when choosing a payment processor is the deposit frequency. What this means is how soon will you receive a settlement deposit in your bank account after a customer pays. The deposit frequency may affect how able you are to cover your expenses.

Different processors have different ways of handling deposits and some may charge fees for faster deposits. So look into this and make sure the deposit schedule matches your needs for funds.

Account Integration

Many businesses have a preferred bookkeeping method. They may use software like Quickbooks or another platform. Make sure that your payment processor supports integration with those programs or allows for the exportation of data that can then be easily imported into those programs.

If your payment processor and bookkeeping methods don’t match up, it can cause a lot of problems and extra work for you.

Man holding a wallet and taking out a credit card

Phone Or Point Of Sale Options

Determine if your business will also allow for phone orders or may allow phone orders in the future.

In this case, you’ll need to be able to access software that will allow your custom representatives to accept and run credit cards over the phone. Your payment processor needs to have these integrations readily available so you can merge them with your order system.

If you also own a brick-and-mortar location along with your CBD e-commerce store, you may need point of sale (POS) options as well to take credit cards at the store location.

A trusted payment processor like ECS Payments will offer all of these options for their clients. Whether you are running an e-commerce store, a physical store, or both, you will always be able to easily accept payments from your customers wherever they may be purchasing your CBD products.

How to Get a WooCommerce CBD Merchant Account in 3 Steps

Getting a merchant account for WooCommerce is similar to obtaining a merchant account for any other store. There is a process and once you understand it, it’s relatively easy to understand.

Below are the 3 steps you’ll need to follow to obtain a WooCommerce merchant account.

Register Your CBD Business

If you haven’t already, you’ll need to register your business as a legal entity. This means choosing the type of entity you want your business classified as. The most popular option is an LLC or limited liability company.

An LLC allows the freedom of being structured as a sole proprietorship, a partnership, or a corporation. An LLC also provides certain liability protection for your personal assets should anyone sue your business.

At this stage, you’ll also want to obtain an EIN or employer identification number. This is a tax-identifying number supplied for free by the Internal Revenue Service (IRS). This number acts like a social security number (SSN), but for your business.

Get A Business Bank Account

With your business registered as a legal entity and an EIN in hand, you can then move on to step 2, which is to get a business bank account.

To secure a merchant account you’ll want a separate bank account for all your deposits coming from the payment processor. You don’t want to mix your personal bank accounts with money being generated by your business. This can cause tax problems as well as possibly expose you to certain legal liability in case of a lawsuit.

Also, for many, if not all, high-risk payment processors, CBD sales will only deposit into business bank accounts.

A business bank account is not hard to get and if you already have a relationship with a bank, you can start there. All you will need is your personal information, your legal business registration we talked about in step 1, and your EIN.

You may want to compare the offerings from different banks to see which ones fit your situation the best. Some accounts may have different fees or balance minimums. So make sure to find an account that works for your business and budget.

Open Your High-Risk Merchant Account Today!

Apply To A CBD Payment Processor

With your business registered and your business bank account opened, you can move on to the last step which is applying to a payment processor for an account.

This process is easy and you simply submit your information and wait for approval. However, with a CBD business, things can be a little more complicated due to the nature of the products being sold.

This is why you want to choose a payment processor like ECS Payments which has years of experience processing payments for high-risk merchants who sell CBD products and other high-risk transactions.

ECS can walk you through the entire process of applying for a merchant account and getting underwriting with minimal hassle.

If you’re looking to process payments for CBD products, make sure to work with a processor that has experience in that area as well as other high-risk transactions.

To contact sales, click HERE. And to learn more about ECS CBD Payment Processing visit High-Risk.
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Shanna Sottosanto

Shanna Sottosanto

Financial Writer
Magna Cum Lade BA, Communication, California State University Channel Islands.

Omega Alpha, National Communication Honors Society, Lambda Pi Eta

I spend the majority of my free time as a professional portrait photographer, traveling when I can, and focusing on physical fitness, weight lifting, and nutrition.

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WooCommerce for Your Online CBD Store FAQs

A WooCommerce store hosted by WordPress does not allow CBD sales due to payment processor restrictions. However, if you host a WooCommerce store on your own servers and use your own payment processor, you can sell CBD products.

WooCommerce is open source, so therefore there are no restrictions on what it can be used for when you are hosting the site yourself.

Yes, but there are restrictions on the THC content, which must be below .3%. There may also be certain restrictions depending on which state you are based in.

No. Many payment processors such as those integrated with WooCommerce-hosted stores or Paypal do not allow processing for CBD orders.
You will need a special payment processor such as ECS Payments which specializes in CBD and other high-risk transactions. If you need the best CBD payment processor to accept payments via a WooCommerce store, contact ECS Payments and learn how to easily apply for your own account.