In the middle of March we received notice from our credit card payment processor that they would no longer be able to do business with CBD merchants. Since then we’ve been working ceaselessly to find an alternative for credit cards. So far it has been to no avail, since the few options available are not only very costly but often require sales volumes much higher than what we currently handle (some as high as $10,000 a month). Nevertheless, we’ve sent out numerous lengthy and detailed applications which have been rejected or have not yet received a reply. For the time being, we are still without a CC payment option so we’ve been offering alternatives such as direct wire transfers, Bitcoin and even old fashioned checks by mail. Of these options we’re most excited about Bitcoin because we view cryptocurrencies and blockchain technology as the future of money.
Simply put, Bitcoin is the first popularly accepted peer-to-peer open-source currency needing no centralized bureaucracy to create it or manage transactions. Bitcoin transactions are stored on a database known as the “blockchain” which is shared on computers of everyone in the network allowing users to “follow the money”. We’ve long considered implementing Bitcoin payment but have been encouraged to take action due to immediate circumstances. We realize very few people currently use Bitcoin compared to credit cards, so while we hope to restore CC payments in the future, rather than just wait around we’re continuing to learn more about the details of Bitcoin and will share some of that knowledge in future posts.
Interestingly, according to some merchant account service providers we’ve come across, the crackdown by banks on CBD merchants may be a result of “Operation Chokepoint” an initiative which began in 2013 originally meant to financially starve businesses committing fraud and money laundering and has since spread to businesses not breaking the law but which the government is ideologically opposed to, as reported by newspapers such as the St. Louis Post-Dispatch.