The Best CBD Payment Processors in 2025: Features, Fees, and Compliance

Before we break down and compare specific processors, let’s clarify a few common terms in the CBD payments landscape.

CBD Merchant Account: This is a specialized business bank account that allows your CBD company to accept credit and debit card payments. Because CBD is classified as a high-risk industry, these accounts are subject to more stringent approval processes and often come with higher fees. Unlike traditional merchant accounts, they are designed to accommodate the unique risks associated with selling CBD products, like legal ambiguity and elevated chargeback rates.

CBD Payment Gateway: This is the technology that transfers payment information securely between your website or payment terminal and the payment processor. Think of it as a “digital bridge” that ensures customer payment details are encrypted and transmitted safely. A robust gateway helps ensure seamless customer experiences, supports recurring billing if needed, and provides transaction visibility through reporting tools.

CBD Credit Card Processing: This refers to the full suite of services involved in accepting and settling credit and debit card transactions for CBD sales. Because many card networks place restrictions on CBD, processing these payments involves more than just swiping a card. Processors must work with banks willing to underwrite CBD businesses and remain compliant with federal and state laws.

High-Risk Processing: CBD is classified as high-risk due to regulatory scrutiny, potential legal issues, and a high incidence of chargebacks. This designation affects everything from your chances of approval to the rates you’re offered. High-risk processors have the tools, expertise, and infrastructure to deal with these added complexities.

Understanding these terms will help you choose a payment processing solution for your CBD business that’s both compliant and scalable.

CBD, short for cannabidiol, is one of more than 100 cannabinoids found in the cannabis plant. Unlike THC (tetrahydrocannabinol), CBD is non-psychoactive – in other words, it doesn’t get you high. Instead, it’s typically associated with wellness benefits like relaxation, sleep support, and joint relief; however, these kinds of medical claims cannot legally be made without FDA approval.

CBD comes in many forms and can be consumed via oils, tinctures, topicals, edibles, or even inhaled with CBD flower or vapes. You can even find CBD formulations for dogs and cats. CBD can be extracted from either traditional marijuana plants or commercially grown hemp. Despite its non-psychoactive nature, CBD’s association with cannabis means many financial institutions remain cautious. This stigma creates complications around payment processing and merchant account approval.

Even though the 2018 Farm Bill legalized hemp-derived CBD products at the federal level, CBD businesses are classified as high-risk. As a retailer, some of the hurdles you’ll face include:

• FDA Regulation: CBD companies cannot make therapeutic claims without FDA approval. This limits how products can be marketed and adds compliance risk.
• Credit Card Networks: Visa, MasterCard, and other card networks have strict policies for high-risk industries like CBD. Violations can lead to blacklisting.
• Chargebacks: The wellness and supplement industry, which CBD falls under, has a higher-than-average rate of chargebacks; customers may dispute transactions more frequently due to delivery delays, product misunderstandings, or unmet expectations. These chargebacks can hurt your reputation and lead to account termination.

State-by-State Variation

Some states impose additional restrictions, require licensing, or prohibit certain forms of CBD like edibles and vapes. This patchwork of rules complicates payment processing, as many processors are unwilling to navigate the complex legal landscape.

For example:

• Idaho requires CBD to contain 0% THC – not even trace amounts – which takes most full-spectrum products off the table for retailers.
• South Dakota only allows CBD with approval from the state’s health department.
• Texas allows CBD but prohibits marketing claims and enforces strict labeling requirements.
• California regulates CBD as a dietary supplement but still restricts its use in food and beverage products unless licensed.

These state-level requirements can trip up retailers and processors alike. A product that’s legal in Colorado might be banned in Iowa. Payment processors that specialize in CBD will often provide a compliance checklist and restrict transactions based on zip code to avoid legal exposure.

Why Traditional Processors Avoid CBD

Consider this: A new online retailer gets approved for Stripe, sets up shop, and starts selling CBD gummies. A few weeks in, their account is frozen without warning. Why? Because automated risk detection software flagged “CBD” in the product descriptions. No human reviewed the decision. The business is now in limbo, waiting weeks for a resolution while customers can’t check out. Revenue comes to a screeching halt.

This kind of scenario is all too common with mainstream payment processors. Even Square – which openly supports hemp-derived CBD – has strict rules, limited customer support, and higher-than-average fees.

Specialist processors understand these risks and build safeguards into the onboarding and monitoring process. They also offer human support so your business isn’t at the mercy of an algorithm.

Companies like Square or Stripe may seem like convenient solutions, but for CBD businesses, they can bring more risk than reward.

Here’s what you’re likely to encounter with a generic payment processor:

• Unexpected Account Shutdowns: One policy misstep or flagged product can lead to instant account closure. Funds may be held for months, cutting off your cash flow.
• Elevated Fees: Because you’re categorized as high-risk, you might be charged 3.5% or more per transaction, compared to the standard rates around 2.9% or less.
• No Industry Support: When you call support, you’ll likely get a generalist – not someone who understands the compliance requirements of selling CBD.
• Lack of Integration: Most general payment processors don’t integrate well with cannabis-specific point-of-sale or inventory management systems.

Partnering with the right payment processor can dramatically reduce your financial and compliance burdens. Below are some key features to look for.

Regulatory Compliance

Make sure the processor has deep experience with CBD and high-risk industries. They should offer clear guidance on compliance requirements and ideally help you with onboarding and document preparation.

Fees and Rates

Understand upfront how much you’ll be paying per transaction. This goes beyond the base rate; also ask about:

• Monthly minimums
• Setup fees
• PCI compliance fees
• Chargeback fees
• Rolling reserves

Chargeback Protection

Some providers offer tools to manage and even reduce chargebacks. These may include dispute notifications, fraud detection, and alerts that allow you to respond before losing the funds.

System Integration

Your processor should integrate seamlessly with your CBD POS, eCommerce platform, and your inventory software. Manual reconciliation wastes time and leads to errors.

Customer Support

This is an often-overlooked but critically important component. Look for:

• Live phone support with short wait times
• Specialists familiar with CBD regulations
• No chatbots for sensitive issues

Scalability

Will your payment processor support you as you grow? This includes:

• Adding locations
• Launching THC products
• Selling across state lines
• Handling higher transaction volumes

Unlike low-risk accounts, approval for a high-risk CBD merchant account is more rigorous and requires extensive documentation. Below is a look at what you can expect from the process.

Application Requirements:

• Business License: Must be current and in good standing.
• COAs: Certificates of analysis confirming THC content for each product.
• Product List: Full list of items you plan to sell, including images and ingredients.
• Website Policies: Clear return, refund, privacy, and shipping policies.
• Age Verification: For ingestibles or vapes, age-gating must be present.

The Underwriting Process:

Getting approved for a CBD merchant account isn’t just about passing a credit check. Underwriters will look closely at the following:

• Business history: New businesses may be asked for projected revenue and business plans.
• Website review: Underwriters will scrutinize your online store. Common issues include broken links, lack of policy pages, unclear product labeling, or unsupported claims.
• Product compliance: If your product pages include phrases like “reduces anxiety” or “treats inflammation,” your application may be rejected outright.
• Banking transparency: You’ll likely be asked for three to six months of business bank statements. These help the underwriter assess financial health and the risk of chargebacks.

If approved, you may be assigned a rolling reserve – a percentage of each transaction held by the processor to cover potential chargebacks. These can range from 5 to 15%, depending on your risk profile.

Tips for a Smooth Approval:

• Use a processor that specializes in CBD.
• Provide thorough documentation from day one.
• Make sure your site is polished and compliant – no medical claims, full COAs posted, etc.

Pros: Cova Payments is designed specifically for cannabis, CBD, and hemp-derived businesses. Unlike traditional processors that treat CBD merchants as an afterthought, Cova’s system is built from the ground up to meet the compliance, reporting, and operational needs of the industry.

• All-in-one solution including Cova’s industry-leading POS and inventory system.
• One of the lowest processing rates in the industry with no high-risk markup and free payment terminals. Cova also gives you the ability to pass processing fees on to your customers, keeping your costs lower.
• Robust suite of features and reporting tailored to CBD retail.
• Live support with cannabis-trained specialists who respond in under 30 seconds on average. You’ll never talk to an AI chatbot.
• Scales with your business – including a seamless transition to THC sales if and when your state allows it. One of the highest approval rates in the industry thanks to nearly a decade of cannabis experience.

Cons: Exclusively available to Cova POS users, this solution comes with a higher monthly software fee compared to platforms like Square or Lightspeed. However, many retailers find that the significantly lower payment processing fees and reduced chargebacks lead to substantial overall savings. Plus, they benefit from a more advanced POS and inventory management system tailored specifically to cannabis retail.

Pros:

• Well-known retail brand with built-in eCommerce tools.
• Offers multi-location support and customizable inventory features.
• Entry-level pricing that’s lower than Cova.

Cons:

• Higher processing fees than Cova, which can quickly add up and nullify savings from the monthly fee.
• Lacking in compliance features since it does not specialize in CBD.
• You’ll need to switch to a different POS if you decide to sell THC products in the future.
  
  

Pros:

• Fast, easy setup with free hardware for qualifying businesses.
• Flat-rate pricing makes cost planning easy.

Cons:

• Prohibits ingestible CBD including oils and gummies.
• High flat fees (At least 3.5% plus $0.10 per in-person transaction)
• Difficult application process with strict documentation requirements.
• Poor account stability and limited support for CBD disputes.
• Frequent reports of account shutdowns and reserve holds.

Pros:

• Connects you with a bank that will approve your CBD products.
• Excellent eCommerce integration and support for multiple gateways.
• Dedicated account reps and onboarding assistance.
• Offers ACH and QR code payment support.

Cons:

• Pricing isn’t disclosed – you must request a quote.
• Terminal contracts may lock you into long terms.
• Underwriting can be slow, especially for new businesses.

Pros:

• Broad network of banks that specialize in CBD.
• Can offer interchange-plus pricing.
• Offers multi-currency and bank payment options.

Cons:

• Fees can still be high, despite transparent pricing.
• Rolling reserves are often required.
• Contracts may include termination fees.
• Not ideal for startups due to onboarding time.

Pros:

• Proprietary gateway that load-balances across multiple bank accounts.
• Long-standing player in the high-risk space.
• Known for responsive onboarding support.

Cons:

• Expensive monthly fees (roughly $34/month plus $99 setup).
• Complicated system best suited for high-volume sellers.
• Pricing not published – you must request a quote.

Your CBD payment processor is more than just a middleman; it’s a partner that can either help your business grow or hold you back with hidden fees, rejected transactions, lost revenue, or worse – like being shut down completely. Mainstream solutions might offer fast onboarding, but they aren’t built for the long-term needs of a CBD brand.

That’s why experienced CBD retailers are turning to Cova Payments. Cova was built from the ground up to support cannabis and CBD retail with unmatched reliability, compliance expertise, seamless POS integration, transparent rates, and future-proof infrastructure. Whether you’re opening your first store, launching online, or expanding into THC, Cova gives you the tools, support, and confidence to grow.

Want to dive deeper into how CBD payment processing works? Check out our CBD payment service page or our in-depth dispensary payment guide.