C3: Banking, Card Machines, and Payment Providers

1. Finding a Business Bank Account

One of the first financial steps is securing a business bank account. Many traditional banks remain cautious about working with CBD companies due to the perceived legal risks associated with the cannabis industry. However, there are banks and financial institutions that are more open to CBD businesses, provided they meet compliance requirements.

1.1. Traditional Banks vs. Specialist Providers

Traditional Banks: Some mainstream banks may outright refuse to work with CBD businesses, while others may have strict requirements or additional due diligence procedures. Major UK banks like Barclays, HSBC, and Lloyds have varying policies, so it’s worth enquiring directly.

Specialist Banks and Payment Providers: There are also financial institutions and digital banks specifically catering to high-risk industries like CBD. These include banks that have a better understanding of CBD regulations and compliance requirements.

1.2. What Banks Will Look For

Regulatory Compliance: Banks will want to see that your business complies with all relevant regulations, including UK Novel Foods guidelines, FSA rules, and laws governing THC levels.

Business Transparency: You will need to provide detailed documentation about your business activities, product lines, sources of income, and compliance with UK laws.

Third-Party Lab Testing: Providing Certificates of Analysis (COAs) for your products, showing that they meet legal THC limits, can help reassure banks of your compliance.

1.3. Recommended Specialist Financial Institutions

The CTA's preferred providers are:

Zempler Bank

2. Setting Up Card Machines and POS Systems

If your business operates a physical store or participates in events and expos, having a reliable point-of-sale (POS) system and card machine is essential for processing payments. However, many payment processors, especially traditional providers, may restrict CBD businesses due to the perceived risk.

2.1. Traditional POS Providers

Square and iZettle: These are common POS systems for small businesses, but they may restrict CBD transactions. You should check their latest terms and conditions to see if they allow CBD sales.

2.2. Specialist High-Risk POS Providers

Some POS providers specialise in high-risk industries, including CBD. They understand the regulatory environment and offer services tailored to businesses operating in this space.

Accept Cards

2.3. Mobile Payment Systems for Events

If you’re selling CBD products at pop-up shops, expos, or trade fairs, using mobile payment systems like SumUp or PayAnywhere can provide the flexibility to process payments on the go. However, like other processors, they may have restrictions on CBD sales, so always check for any limitations on high-risk industries.

3. Choosing a Payment Gateway for Online Sales

Accepting online payments is a critical aspect of selling CBD products through e-commerce. However, finding a payment processor willing to work with CBD businesses can be challenging due to the industry’s legal complexities. Many mainstream payment providers, such as PayPal and Stripe, do not allow CBD transactions in the UK.

3.1. High-Risk Payment Processors

For CBD businesses, it's often necessary to work with a high-risk payment processor that specialises in industries considered riskier by traditional financial institutions. These processors are more familiar with CBD regulations and have tailored their services to ensure compliance.

3.2. Recommended Payment Gateways for CBD Businesses

Fibonatix: A payment gateway that specialises in high-risk sectors like CBD. Fibonatix offers tailored payment processing solutions and is a popular choice among CBD businesses in the UK.

Worldpay: Worldpay is a major provider that accepts CBD transactions under certain conditions. It has specific guidelines that CBD businesses must meet to use their services, but they offer robust payment solutions.

Viva Wallet: A flexible payment processor that works with CBD companies, offering services such as multi-currency payments and secure online payment options.

3.3. Factors to Consider When Choosing a Payment Gateway

Transaction Fees: High-risk processors often charge higher transaction fees compared to traditional payment gateways. Ensure you account for these fees when setting your pricing strategy.

Integration with E-commerce Platforms: Ensure the payment gateway integrates smoothly with your existing e-commerce platform (e.g., Shopify, WooCommerce, or BigCommerce).

Chargeback Protections: CBD businesses can experience higher chargeback rates due to the nature of the industry. Choose a payment processor with chargeback protection and fraud prevention features to safeguard your business.

4. Dealing with Payment Processing Challenges

The CBD industry is still seen as high-risk by financial institutions due to the legal grey areas in many regions. To ensure smooth payment processing and banking operations, follow these steps to minimise disruptions:

4.1. Be Transparent with Providers

When applying for a payment processor or business bank account, be upfront about your involvement in the CBD industry. Many businesses have had accounts shut down because they didn’t disclose that they were selling CBD products. Being transparent from the start reduces the risk of your account being closed unexpectedly.

4.2. Ensure Full Compliance with UK Regulations

Banks and payment processors are more likely to work with CBD businesses that have demonstrated compliance with the UK’s strict regulatory environment. Make sure you have all necessary documentation, such as:

Certificates of Analysis (COAs): To prove your products contain no more than the legal THC limit.

Novel Foods Authorisation: If applicable, provide evidence that your products comply with the FSA’s Novel Foods requirements.

4.3. Diversify Payment Options

To avoid disruptions, consider offering multiple payment options to your customers. For example, if your primary payment processor experiences issues, having alternative methods such as bank transfers, manual payments, or even cryptocurrency payments can help maintain sales continuity.

4.4. Monitor for Changes in Policy

Payment processors may change their policies over time as CBD regulations evolve. It’s important to regularly review your provider’s terms and conditions and stay informed about any policy updates that could affect your ability to process payments.