(Newswire.net — January 23, 2018) — Cannabidiol or CBD is just one of the over sixty naturally occurring chemical compounds that can be extracted from the cannabis plant. Although the medical use of CBD started almost five decades ago, its potential to treat several health problems with high effectiveness is still highly acknowledged until today. Among the medical benefits of using CBD include the suppression of spasms and epileptic seizures, reduction of anxiety, and relief of chronic pain. It is also used to inhibit the growth of tumors, treat nausea and dizziness, and delay ageing of cells with its antioxidant properties.
While CBD is highly acclaimed as a natural ‘wonder’ medicine, there are some challenges and strict guidelines that must be met before a merchant can acquire and sell CBD to consumers. In fact, any business related to cannabidiol is listed under high-risk industries. One of the aspects where CBD merchants face a number of obstacles are the payment gateway. Learn more about the top three biggest CBD payment gateway challenges and their corresponding solutions in the list below.
1. High Processing Cost
Many issuing banks and payment gateways charge high processing costs to retailers selling cannabidiol, making the profitability of this kind of business less and less these days. Cannabidiol operations are now two to three times less profitable in the United States than in Europe because of the markup fees which includes PCI fees, monthly minimum fees, batch fees, IRS report fees, statement fees, and more.
The best thing that you can do is to look for the right payment gateway provider which is not only transparent but also offers cost-effective solutions for you. The Southern Institute offers exactly the best payment processing rates in the CBD industry, helping you gain more profit while keeping in full compliance with the existing state guidelines and regulations. Visit thesoutherninstitute.com to learn more about the best payment gateway services for your CBD business and for other sectors such as travel agencies and fantasy sports too.
2. Chargebacks
When it comes to high-risk businesses such as CBD retailing, receiving frequent chargebacks is one thing that you should always be prepared for. Generally, buyers are favored by credit card processors when it comes to chargebacks; merchants are favored in bank payments, while for debit card payments, processors are usually fair.
To minimize the rate of getting chargebacks, you should make sure that you fully understand the fine print of the contract between your company and the payment gateway service provider. This can help you know more about your accountability with future chargebacks, and calculate your risks by knowing the required penalty fees beforehand.
3. Frauds
With the growth of the e-commerce industry, the rate at which fraudulent activities including data theft and breaching of security networks are occurring also increases. While the prevention of fraud is something that payment gateway service providers should take action on, there are still some measures that you can do to help minimize your risks. One thing that you should look for when choosing a payment gateway partner is the PCI DSS (Payment Card Industry – Data Security Standard) Level 1 certification which completely addresses the 12-point criteria in 6 security areas.