* Please note, this information was provided directly from Paytriot Payments *
Most online retailers sell CBD on a product by product basis. Some, however, are looking into alternative, subscription-based models, owing to how the majority of consumers use CBD. People want reliable, regular deliveries so that they can manage their health conditions and, hopefully, improve their health.
Over the last few years, we’ve seen the emergence of multiple subscription-based retail services. Instead of placing an order for a product every month, a subscription service ticks along automatically, sending the customer the items that they need without them having to manually re-order.
Examples of this abound. Harry’s razors, for instance, offers its customers a monthly subscription that lets them get fresh shaving products delivered directly to their home. It dramatically cuts down on administration and improves repeat custom.
The Problem With Subscription Services For Cannabis Products
While subscriptions are fast becoming the norm for media and some online retail sectors, the same cannot be said of the cannabis market.
Payment processing merchants are notoriously risk-averse. They don’t like offering card transaction services to new companies at the best of times, but certainly not when those companies sell cannabis products. Cannabis is, in the eyes of many of these service providers, a taboo and highly risky proposition.
The challenge for online CBD retailers is not only to change attitudes about CBD-related products but also to find payment card merchants who are willing to offer them subscription payment options.
Viva Wallet, for instance, does not currently accept subscriptions and has indicated that it may stop supporting cannabis companies altogether. If you rely on Viva Wallet to take secure payments from customers, you have a problem.
An Alternative To Viva Wallet For Accepting CBD/Cannabis Subscriptions
The good news is that there is an alternative. Paytriot now offers Woocommerce cannabis retailers a recurring transaction plugin that allows them to take subscription payments through their website. The gateway captures card details and gives cannabis retailers control over things like payment frequency, all while keeping confidential payment data private.
Paytriot makes setting up a subscription easy for both you and your customers. On the customer side, it works similarly to a regular, one-off transaction. A customer enters their card details into a form on your site and then selects an option permitting you to take payments regularly. Paytriot provides you with a dashboard at your end, which keeps customer card details private but allows you to monitor things like payment frequency and whether a customer has paid you or not.
Adjusting frequencies and how much you charge is no more difficult than through Viva Wallet. You set the amount that you’d like a customer to pay, and then the software automatically updates your payment system to reflect the new prices. Setup is easy and inexpensive.
What About PSD2 Regulations?
The European Union is introducing a new payment rule for retailers who wish to collect money from customers online. The purpose of the law is to add a new level of security to make sure that the person using the card is the card’s owner.
Cannabis and CBD retailers will need to obey the new rules if they operate in the European Economic area or create payments on behalf of accounts in the EEA.
If you take card payments, you’ll have to provide customers with the 3D Secure payment method before 14th September 2019 to remain compliant.
Some low-value transactions do not require 3D Secure authentication. However, it is up to the individual banks whether the merchant must provide this step or not.
This puts cannabis and CBD retailers in a tricky position. The monetary value of their products might be relatively low, but banks may see them as high-risk business and insist that they provide the 3D Secure experience to their customers. Banks are free to pick and choose which companies they single out for special treatment, meaning that yours could be in the firing line.
Paytriot says that it is the job of retailers to implement compliance measures. In other words, you need to ensure that your website offers the 3D Secure payment options to satisfy the PSD2 regulations.
Time is of the essence. At the time of writing, there are about five weeks before these changes come into force. This means that if you haven’t begun the process of offering customers an additional level of authentication, you need to do so now.
Choosing an API that is compatible with the new regulations for both one-off and recurring payments is vital. If you want to accept subscription payments for CBD and cannabis products, then your team needs to put in place a set of measures now which both conform to the new regulations and maximise conversions.
Some merchant processing gateways actively work to ensure that you minimize the number of customers forwarded to authentication pages by claiming exemptions. Again, whether an exemption is accepted is at the discretion of the bank, but with good card payments software, you can improve your chances of a smooth sale. You don’t want customers abandoning their carts because they’re confused or don’t want to go through a secondary authentication process.
The Paytriot Payments Plug-In
The Paytriot payment plugin makes it incredibly simple for customers to set up recurring payments through your website. Whereas in the past, cannabis and CBD retailers struggled to find reliable partners, that’s no longer true. Paytriot is easy to set up and actively encourages the CBD market. It wants to help firms like yours sell cannabis products to more people and offer flexible payments options.
The customer journey to authentication should be simple. Paytriot has done a lot of behind-the-scenes work to ensure that it is. However, with PSD2 regulations coming down the pike in Europe, you must prepare yourself. Cannabis and CBD companies will probably be right in the firing line of these new regulations, making it more challenging to push customers through the sales process. You need a payments gateway that makes this as straightforward as possible while applying for exemptions from the rules wherever the law allows.