Processing credit card payments for CBD purchases may get a whole lot easier for retailers. Square, maker of popular payment processing products and services, will now be working with CBD retailers.
The move is likely to be welcomed by many business owners in the CBD space who are often blocked from using mainstream payment processing options or face exorbitant fees for transactions.
“We believe everyone should be able to participate and thrive in the economy,” Square said on its blog. “Today, we’re thrilled to launch our CBD early-access program, which allows businesses in the U.S. to sell CBD products on Square quickly, easily, and securely.”
Square is confident it can now legally do business with CBD merchants after federal regulatory changes enacted by the Agricultural Improvement Act of 2018 (farm bill). The company’s General Counsel Sivan Whiteley said Square thoroughly researched whether or not CBD sales could be facilitated through its platform and remain within federal compliance. Whiteley said Square works hard to ensure CBD sellers using its payment services are adhering to federal guidelines regarding labeling, marketing, and health claims. Ultimately, however, the burden of compliance will fall to retailers, according to Whiteley.
“If you’re opening a restaurant, there are tens of thousands of laws that you have to comply with,” Whiteley said. “We just decided to take the extra step to do enhanced due diligence but at the end of the day, sellers are responsible for their own compliance.”
Square also outlined key information on fees retailers will incur based on type of transaction:
- In person — 3.90 percent, plus 10¢ per tap, dip, or swipe.
- Online and in-app — 4.20 percent, plus 30¢ per transaction.
- Keyed-in, card on file, virtual terminal — 4.80 percent, plus 15¢ per transaction.
CBD retailers using Square will also be eligible for more than just payment processing. Business owners can use the platform for assistance with payroll and inventory management.
Kevin Liebrock, chief operating officer for Bluebird Botanicals, a producer of hemp and CBD products, is welcoming Square’s decision to work with the CBD industry.
“In the early stages of the emerging hemp industry, Bluebird Botanicals was constrained to using merchant processors that charged exorbitant rates. As an eCommerce company, we were at one point only able to receive payments by check,” Liebrock said. “With Square, we don’t just get better rates—we’re also treated with respect and trust. And now, instead of waiting for checks in the mail, we get paid the next business day.”