Last updated: June 2025

UK merchants selling CBD, vape, or supplements on Shopify are often told they need a high-risk merchant account. In many cases, they don't. Here's what a high-risk merchant account actually involves, why Pay by Bank via Fena changes the equation, and how to choose the right setup.

The standard advice for regulated Shopify sellers is often wrong

When UK merchants selling CBD, vape products, supplements, or adult items try to sort out payments for their Shopify store, the advice they usually receive is some version of the same thing: you need a high-risk merchant account. Find a specialist processor. Expect high fees, rolling reserves, and a lengthy underwriting process.

This advice isn't completely wrong — high-risk merchant accounts exist for a reason and work for some merchants in some contexts. But it presents a narrow view of the options, and it misses a development that's materially changed the payment landscape for regulated UK ecommerce: the availability of Pay by Bank through FCA-authorised open banking providers like Fena.

Pay by Bank doesn't require a traditional merchant account. It doesn't go through card networks. It isn't subject to the card network acceptable use policies that prevent Shopify Payments and most card-based processors from supporting regulated categories. And it can be live on a Shopify store significantly faster than the weeks-long underwriting process a specialist card processor typically requires.

This guide explains what high-risk merchant accounts are, what they cost and require, and when Pay by Bank via Fena is the more practical and cost-efficient choice.

Quick summary

• Shopify Payments doesn't support most regulated product categories because it operates on Stripe's infrastructure, which follows card network acceptable use policies that restrict these categories regardless of UK legality

• A high-risk merchant account from a specialist card processor solves the access problem but introduces elevated fees (typically 4–7%), rolling reserves, lengthy underwriting, and ongoing account stability risk

• Pay by Bank via Fena provides an alternative that doesn't require a traditional merchant account, doesn't go through card networks, and isn't subject to card network category restrictions

• Fena is FCA-authorised, integrates directly with Shopify, and typically has merchants live significantly faster than traditional merchant account onboarding

• Pay by Bank eliminates chargebacks on transactions processed through it, which is particularly valuable for regulated categories that attract elevated dispute rates

• The choice between a traditional high-risk merchant account and Pay by Bank depends on whether your customers need card payment options, the proportion of UK versus international buyers, and your appetite for ongoing account stability risk

Why Shopify Payments doesn't work for regulated categories

Shopify Payments is built on Stripe's payment infrastructure. Stripe operates within card network rules — specifically, the acceptable use policies set by Visa and Mastercard. These policies restrict which product categories can be processed through card network infrastructure, and those restrictions apply globally regardless of local legality.

CBD products, vape and nicotine products, adult content and products, certain supplements, and several other categories fall within these card network restrictions. A UK merchant selling legal, compliant CBD products cannot use Shopify Payments not because their business is illegal but because card network policies classify the category as restricted.

This is why merchants in these categories find that Shopify Payments declines their application, restricts their account after approval, or suspends them during routine risk reviews. The restriction isn't a Shopify decision in isolation — it flows from the card network rules that Shopify Payments must operate within.

What a high-risk merchant account actually involves

A high-risk merchant account is a card processing relationship with a specialist acquirer that has accepted categories the major card processors avoid. They're a legitimate solution, and for merchants who need to accept cards in regulated categories, they're often the only card-based option.

The commercial realities of high-risk merchant accounts are worth understanding clearly before committing to one.

Fees.

High-risk card processors charge significantly more than standard processors — typically 4–7% per transaction, compared to 1.5–2.5% for standard card rates. The premium reflects the additional risk the processor is taking on by supporting a restricted category. For merchants with tight margins, this fee differential is commercially significant and compounds with revenue growth.

Rolling reserves.

Most high-risk merchant accounts require the merchant to maintain a reserve — typically 5–10% of rolling revenue held back for a period of several months — as a buffer against chargebacks. This capital is the merchant's own money, earning no return, held by the processor. At meaningful transaction volumes, the reserve represents a substantial amount of tied-up working capital.

Underwriting timeline.

The onboarding process for a high-risk merchant account involves detailed documentation: business registration, product information, certificates of analysis for relevant products, intended use statements, supplier verification, and sometimes personal financial information. Review timelines of two to four weeks are typical. For a merchant who needs to start taking payments, this is a significant delay.

Ongoing account stability risk.

High-risk card processors reserve the right to terminate merchant accounts if chargeback rates rise, if product mix changes, or if their own risk appetite changes. Merchants in these categories have experienced account termination with limited notice, sometimes leaving in-progress settlements held and payment infrastructure unavailable at a critical moment.

Chargeback exposure.

Because these accounts process card payments, they carry standard card chargeback exposure — plus the elevated dispute rates that regulated categories often attract. Chargebacks trigger fees, escalate to account reviews if rates rise, and can ultimately threaten the processing relationship.

How Pay by Bank changes the equation

Pay by Bank via Fena approaches the problem from a different direction. Rather than finding a card processor willing to accept a regulated category at a premium, it removes card networks from the transaction entirely.

The payment flow uses UK open banking infrastructure — the FCA-regulated framework built on direct bank-to-bank payment rails that the major UK banks are required to support. When a customer pays via Pay by Bank, they authenticate the payment within their own banking app and the funds transfer directly to the merchant's account. There's no card network. No acquirer. No card network acceptable use policy to apply to the product category.

The practical consequences for regulated UK merchants:

No card network category restrictions.

The restriction that blocks CBD, vape, and similar categories from Shopify Payments doesn't exist in the Pay by Bank model. Fena's eligibility criteria are based on whether the merchant operates legally in the UK and meets Fena's compliance requirements — not on card network category policies.

FCA-regulated infrastructure.

Fena is FCA-authorised to provide open banking payment services. The compliance foundation is regulatory rather than self-certified, which provides merchants with verifiable evidence that their payment processing meets UK regulatory standards.

No rolling reserves.

Pay by Bank doesn't operate on the rolling reserve model typical of high-risk card processors, because the chargeback risk that makes reserves necessary doesn't exist in the same way for account-to-account payments.

Faster to launch.

Fena's onboarding for UK Shopify merchants is significantly faster than traditional high-risk merchant account underwriting. Rather than the two-to-four week review process typical of specialist card processors, most merchants are live within a much shorter timeframe.

Same-day settlement.

Pay by Bank via Fena settles same-day or faster, compared to the two-to-seven day settlement windows typical of card processing and the longer settlement cycles that high-risk processors sometimes impose.

No chargebacks.

Pay by Bank transactions don't go through card networks, so the card chargeback mechanism doesn't apply. For regulated category merchants where elevated chargeback rates are a recurring operational and financial problem, removing this exposure structurally matters more than reducing the chargeback rate.

Do you still need a high-risk merchant account?

The answer depends on your specific situation.

Pay by Bank via Fena may be sufficient if:

your customer base is primarily UK-based with access to major UK bank accounts; you're selling products that are legally compliant and can be marketed compliantly in the UK; your customers are comfortable with bank-authenticated payment flows (increasingly the case as open banking familiarity grows among UK consumers); and you want to avoid the fees, reserves, and ongoing account risk associated with high-risk card processing.

A high-risk merchant account may still be needed if:

you have a significant proportion of international customers whose bank accounts aren't covered by UK open banking; you need to support card credit and debit options for customers who specifically prefer or require card payment; or your product categories include items where customer financing options are commercially important. In this case, the most effective setup often combines a high-risk card processor for the card-paying segment with Pay by Bank via Fena for UK bank account customers — getting lower fees and no chargebacks on the Pay by Bank volume.

What you don't need:

multiple high-risk card processor relationships, complex multi-gateway setups, or the assumption that card processing is the only viable path. For many regulated UK merchants, Pay by Bank via Fena as the primary or sole payment method is a simpler, lower-cost, and more operationally stable solution than a high-risk merchant account.

How to get started with Pay by Bank on Shopify

Fena's Pay by Bank integration connects directly to Shopify as a checkout payment option. The implementation doesn't require replacing your existing store setup — it adds Pay by Bank as an additional option and, for merchants in restricted categories who can't use Shopify Payments, it can serve as the primary or sole payment method.

The onboarding process involves compliance verification — Fena confirms that the merchant operates legally in the UK and that their products and practices meet the compliance requirements for regulated categories. This is faster and less documentation-intensive than traditional high-risk merchant account underwriting, and the result is a payment infrastructure that is both compliant and stable.

For merchants currently operating with no payment solution because they're waiting for a high-risk processor to complete underwriting, Pay by Bank via Fena can bridge the gap or, in many cases, replace the need for a card processor entirely.

Frequently asked questions

Do I need a merchant account to sell CBD or vape products on Shopify UK?

Not necessarily. Traditional merchant accounts — specialist card processors — are one route, but Pay by Bank via Fena provides an alternative that doesn't require a card-based merchant account. It uses open banking infrastructure rather than card networks, which means card network category restrictions don't apply. Fena is FCA-authorised and can support legal CBD, vape, and supplement merchants on Shopify.

Why does Shopify Payments reject regulated product categories?

Shopify Payments is built on Stripe's infrastructure, which operates within card network acceptable use policies set by Visa and Mastercard. These policies restrict certain product categories globally, regardless of whether those products are legal in the UK. The restriction flows from card network rules rather than Shopify's own policy.

What's wrong with just getting a high-risk merchant account?

High-risk merchant accounts work but come with meaningful costs: transaction fees of 4–7%, rolling reserves that tie up working capital, underwriting timelines of weeks, and ongoing account stability risk. They also carry card chargeback exposure, which is elevated in regulated categories. They're a valid option but not the only one.

How does Pay by Bank avoid the problems of high-risk card processing?

Pay by Bank doesn't go through card networks, so card network category restrictions don't apply. Without cards in the flow, there are no chargebacks. Settlement is same-day rather than multi-day. And there are no rolling reserves because the chargeback risk that justifies reserves in the card model doesn't exist.

Can I use Pay by Bank alongside a card processor on Shopify?

Yes. Many merchants find the best setup combines Pay by Bank via Fena for UK bank account customers — getting the fee, chargeback, and settlement benefits on that volume — with a card processor for customers who specifically need to pay by card. Fena's integration adds Pay by Bank as an additional checkout option rather than requiring you to remove existing methods.

How long does it take to get started with Pay by Bank via Fena on Shopify?

The timeline is significantly shorter than traditional high-risk merchant account underwriting. For most UK Shopify merchants in regulated categories, the verification and integration process takes days rather than the two-to-four weeks typical of specialist card processors.

Does Pay by Bank work for subscriptions and recurring payments?

Pay by Bank is best suited to one-off payments. For automated recurring billing where the customer doesn't re-authenticate each payment, card-on-file or direct debit infrastructure is more appropriate. Variable Recurring Payments via open banking are in development in the UK and will extend this capability, but for current subscription setups, card or direct debit remains the right mechanism for the recurring charge.