Operating a kratom business should be simple, right?
You have awesome products, happy customers, and a plan to scale.
But there’s one problem…
Payment processing is a total mess.
One day you’re racking up thousands in sales. The next your account is suspended without warning, funds are being held, customers are unable to checkout, and you’re scrambling to contact your processor to find out why orders are not shipping.
Sound familiar?
The kratom industry faces unique payment processing challenges that 99% of other businesses will never have to deal with. But that doesn’t mean there’s nothing you can do about it.
In fact, there are several steps you can take to build a reliable payment structure that actually works.
Let’s dig into them…
Here’s What We’ll Cover:
- Why Kratom Payment Processing Is Unique
- What Payment Instability Costs Your Business
- Building A Reliable Payment Structure
- Picking the Best Payment Processing Partner
Why Kratom Payment Processing Is Unique
Kratom finds itself in an unfortunate grey area.
The herb is legal in most states and your customers want it, but major processors like PayPal, Stripe, and Square won’t work with you.
Why not? Because financial institutions categorize kratom as “high risk.”
This is a result of regulatory ambiguity and higher chargeback activity among kratom merchants. And it means off-the-shelf payment solutions simply aren’t an option.
Here’s what that looks like:
- Account shutdowns with little to no notice
- Funds held for 90-180 days
- Higher processing fees
- Stricter underwriting requirements
- Rolling reserves
It gets worse…
67% of kratom merchants have had at least one processor shutdown within the first two years of business. Two out of every three kratom businesses. Dealing with payment disruptions that have the potential to wipe out your entire business’ cash flow overnight.
The good news is that specialized kratom payment processors do exist. Payment companies like 2Accept understand the kratom space and offer high-risk merchant accounts for kratom businesses that provide the stability and compliance you need to do business.
The Real Cost Of Payment Instability
Let’s talk real money for a second.
The cost of payment instability is more than just inconvenience. It’s actual dollars coming out of your pocket. Let’s break down how.
First, there are the direct hits you take. Lost sales. Customer churn. Reputation damage.
These are obvious. But there are deeper hidden costs…
Shut down by a processor? Time to go find another one. It takes time. Usually at least 2-3 weeks minimum. And that’s assuming you have all of your ducks in a row with your documentation.
But during that time frame? You have zero incoming revenue.
Then there are the higher fees. High-risk processors charge a minimum of 3.5-5.5% plus $0.20-$0.30 per transaction. Add on a 10-15% rolling reserve that’s held for 6-12 months.
That’s all coming out of your pockets as well.
But consider this…
The kratom market generated $441.4 million in sales through regulated, mainstream channels with year-over-year growth of 21.9%. That’s insane. Raw growth potential for your business.
To miss out on that opportunity because of payment processing issues is the true cost.
Building A Reliable Payment System
So what can you do to sidestep the dreaded kratom payment processing game?
It all comes down to putting layers of defense in place.
First you need proper documentation.
Kratom is high risk, which means high risk payment processors are going to require more documentation from you than regular processors will.
Have the following ready to go at all times:
- Business license and EIN
- Bank statements (6 months or more)
- Existing processing history if you have it
- Product descriptions and website compliance statements
- Age verification systems
- Geofencing systems to block sales in states where kratom is illegal
Chargeback protection is the next layer.
Chargebacks are the kraken of the kratom business. Keep your rate below 1% or you risk termination. Some processors have reported a 4x increase in probability of termination once the 1% chargeback rate is exceeded.
Here’s what you can do about it:
- Clear product descriptions
- Transparent and well-written return/refund policies
- World class customer service
- Expedited shipping with tracking
- Product QC systems
Redundancy is the final piece.
Don’t put all your eggs in one processor’s basket. Build in options so that if one processor is terminated you can pivot to another quickly. Kratom is a 2-3 sponsor bank business right now, meaning when a single bank exits the category your options are limited.
Choosing The Right Payment Partner
This is where most kratom merchants fail.
If your payment processor doesn’t have significant, up-to-date experience with the kratom industry you are setting yourself up for termination and constant payments uncertainty.
Look for these features in a processor:
- Proven kratom experience – They’ve serviced other kratom clients
- Transparent pricing – Hidden fees or surprise charges are a no-go
- Multiple acquiring banks – In-built redundancy for stability
- Compliance acumen – They understand regulations and can keep you on the right side of the law
- Fast approval times – Be in business within weeks, not months
The application itself is also important.
You should expect deep due diligence on your business from processors, as each new client is a risk to their current book of business.
They will want to know your business model. Your product offerings. (Enhanced and extracts face more scrutiny than plain powder) Your website and marketing practices. Enhanced kratom will be held to higher scrutiny.
Be open and honest. Information you try to hide is a risk they will find eventually.
And remember this too…
Approval is just the first phase of the relationship. Continuing to process requires ongoing compliance and management. Stay on top of transactions, watch your chargebacks, and be current with evolving regulations.
Why Specialized Processors Matter
Off-the-shelf, generic high-risk processors will process you, but also process anyone. You get treated as any other high risk business.
Specialized kratom payment processors? They get it.
They understand regulatory grey areas, chargeback problems, state-by-state legal differences. They’ve been there and know how to work with you.
Plus they have established banking relationships. Finding those banking partners all on your own as a small kratom business is virtually impossible.
Making Your Choice
Kratom merchant services have options.
You can gamble with PayPal, Stripe, and Square and hope for the best. But they have all had long and public problems with kratom businesses in the past. Frozen accounts. Terminations. They are not your friend.
Generic high-risk processors will work with you. But they lack the compliance infrastructure and kratom industry knowledge to get the best deal. They also won’t have your back when shit hits the fan like a specialized processor would.
Specialized kratom processors are the third option.
Yes they may charge higher fees, but the difference is justified by in-depth industry expertise and compliance acumen.
The smart play? Build your payment stack on a foundation that isn’t going to crumble.
Final Thoughts
Kratom payment processing doesn’t need to be complicated.
Kratom is high risk. This means standard off-the-shelf processors will not work. Fees will be higher than most businesses see.
But the right partner and some internal policies?
Can result in a robust payment infrastructure that scales your business. No more frozen funds. No more chasing backup processors. No more lost sales.
Transaction processing will actually be smooth. You can focus on what matters most–growing your kratom business and serving your kratom customers.
The kratom industry is poised to boom. Don’t let payment processing be the factor that holds you back.