CBD, kratom, peptides, supplements, weight-loss products, tobacco and vape, online pharmacy, telemedicine and self-defense products are legal to sell in many places, but the rules change by country, state and sometimes city. Banks don’t want to process a sale that turns out to be illegal where the customer lives, so many simply decline the whole category.
That’s why getting approved in these industries depends less on your sales numbers and more on showing that you know the rules and follow them. This guide covers what underwriters look for.
Why banks treat regulated products as high risk
- Changing laws. Rules for hemp-derived CBD, kratom, peptides and vape products differ between states and keep changing. Something legal today can be restricted next year.
- Health claims. Products marketed with medical or weight-loss claims draw regulator attention and “didn’t work” disputes.
- Card network rules. Visa and Mastercard require extra registration and monitoring for some categories, such as online pharmacy, tobacco and certain nutraceuticals.
- Trial offers. Supplements sold on free-trial or auto-ship offers have a long history of chargebacks, so banks look hard at any recurring model.
- Age and shipping restrictions. Tobacco, vape and some self-defense products can’t be sold to minors or shipped to certain places.
Which businesses this covers
- CBD and hemp products
- Kratom businesses
- Peptides and research chemicals
- Nutraceuticals, supplements and weight-loss products
- Tobacco, vape and e-cigarettes
- Online pharmacies and telemedicine
- Self-defense products such as tasers and stun guns
What underwriters will ask for
- Product compliance documents. For CBD, current certificates of analysis (COAs) from an independent lab for each product. For other products, ingredient lists, labels and supplier details.
- Licences. Pharmacy and prescriber licensing for online pharmacies and telemedicine; tobacco and vape retail licences where required.
- Where you ship. A list of the states or countries you sell to and how your checkout blocks the ones you can’t.
- Age verification for age-restricted products.
- Your website and marketing. Underwriters read product pages for medical claims. Remove anything that promises to cure, treat or prevent a condition.
- Your billing model. One-off purchases are simpler. Subscriptions and auto-ship need clear terms and easy cancellation.
- Processing history and the standard business documents: registration, owner ID, and a voided check or bank letter.
How to keep a regulated-product account healthy
- Keep COAs and labels current and link them from product pages. It reassures customers and underwriters alike.
- Block restricted destinations at checkout rather than cancelling orders after payment.
- Avoid health claims in ads, emails and affiliate content as well as on your site. The bank reviews all of it.
- Be clear about auto-ship. Show the renewal terms at checkout and email customers before each shipment.
- Respond to disputes with evidence: tracking, delivery confirmation and the terms the customer accepted.
See also: How High-Risk Businesses Can Reduce Chargebacks.
Frequently asked questions
Why do so many processors refuse CBD and kratom?
Many banks have a blanket policy against them because of the legal uncertainty, not because of anything a specific merchant did. Safe Merchant Solutions works with banking partners that do accept these industries.
Do I need a certificate of analysis for every product?
For CBD, expect underwriters to ask for current third-party lab results for the products you sell. Having them ready speeds up the review.
Can I sell internationally?
It depends on the product and the destination. Tell us where you want to sell, and we’ll match you with a bank whose rules fit.
My account was closed for selling CBD. Can I still apply?
Yes. A closure by a mainstream processor is common in this industry and doesn’t rule you out. See Stripe or PayPal Closed Your Account? What to Do in the Next 48 Hours.
Get approved for your regulated-product business
Safe Merchant Solutions has over 15 years in high-risk processing and more than 25 banking partners, including banks that accept CBD, kratom, peptides, tobacco and online pharmacy merchants.
Get Approved or start a Live Chat to talk through your options.
