Last updated: January 2025

UK CBD merchants on Shopify face rejected payments, fees of 3–7%, rolling reserves, and sudden account closures. Here's what's driving those costs and how Pay by Bank via Fena removes the card network problem entirely.

The payment problem is specific to CBD — and it's structural

Running a CBD brand on Shopify in the UK is operationally straightforward in most respects. Product compliance, labelling, FSA novel foods requirements — these are all navigable. The payment processing problem is different because it doesn't relate to anything the merchant has done wrong. It's a structural consequence of how card networks classify the category.

Visa and Mastercard treat CBD as a restricted category at the network level. This flows through to every processor built on their infrastructure — which includes Shopify Payments, Stripe, and most mainstream gateways. The result: account rejections, mid-trading restrictions, fees that can reach 3–7% per transaction, rolling reserves that tie up cash for months, and a baseline operational uncertainty that most merchants in non-restricted categories never experience.

This guide explains where the costs come from, what the alternatives actually look like in practice, and how Pay by Bank via Fena removes the card network problem for UK CBD merchants on Shopify.

Quick summary

• CBD is classified as restricted by card networks at the global level, which means card-based processors — including Shopify Payments and Stripe — block or restrict it regardless of UK legal compliance

• Specialist high-risk card processors offer access but at significant cost: 3.5–6.5% transaction fees, per-order surcharges, rolling reserves of up to 10% held for up to 180 days, and chargeback fees of £15–20 per case

• Pay by Bank via Fena uses open banking infrastructure rather than card networks, which means card network category restrictions don't apply to CBD merchants

• Fena is FCA-authorised, integrates directly with Shopify, and operates alongside existing payment methods — it doesn't require replacing what's already working

• Settlement is same-day or instant, with no rolling reserves, no chargebacks, and substantially lower per-transaction fees than specialist card processors

What card-based CBD payment processing actually costs

The headline transaction rate from a high-risk card processor is rarely the full picture. For UK CBD merchants on Shopify, the real cost structure typically looks like this.

Transaction fees.

Specialist high-risk processors charge between 3.5% and 6.5% per transaction for CBD, compared to 1.5–2.5% for standard card processing. On a store generating £300,000 in annual revenue, the difference between 2% and 5% is £9,000 a year — before any other costs are considered.

Per-order surcharges.

Most processors apply a fixed per-transaction fee of £0.25–£0.50 on top of the percentage rate. On lower-value orders this adds meaningfully to the effective cost per transaction.

Rolling reserves.

This is the one that catches merchants most off guard. High-risk card processors routinely hold 5–10% of turnover in reserve for a rolling period of up to 180 days, as a buffer against future chargebacks. That's capital the merchant has earned and can't access. On a store doing £50,000 a month, a 10% rolling reserve means £5,000 is permanently tied up in the processor's hands at any given time.

Chargeback fees.

CBD merchants face elevated chargeback rates partly because customers sometimes use card disputes as an informal refund mechanism and partly because some chargebacks stem from cardholders not recognising the billing descriptor. Each dispute carries a fee of £15–20 regardless of outcome, and a chargeback ratio that rises above card network thresholds can trigger further restrictions or account suspension.

Account instability.

The less quantifiable but very real cost is operating with the knowledge that an account can be restricted or closed without detailed warning. Merchants who've had this happen once — often at the worst possible time — carry the cost of contingency planning, backup processors, and the operational disruption of mid-trading account changes.

Why Pay by Bank solves this at the source

The reason card-based processors restrict CBD isn't a judgment about any individual merchant's compliance or operational quality. It's a categorical policy applied at the card network level. The solution isn't to find a card processor more willing to tolerate the category — it's to use infrastructure where the category restriction doesn't exist.

Pay by Bank via Fena uses UK open banking payment rails: direct, bank-to-bank transfers regulated by the FCA, with no Visa or Mastercard involvement. Because there's no card network in the transaction flow, there are no card network acceptable use policies to trigger. A CBD merchant operating legally in the UK is eligible for Fena's Pay by Bank on the basis of their compliance with UK law — not on the basis of how Mastercard classifies their product category.

This isn't a workaround or a grey area. Open banking is the regulated UK financial infrastructure that the FCA oversees and that the major UK banks are required to support. Fena operates within it under FCA authorisation.

What changes for CBD merchants using Pay by Bank via Fena

No card network rejection.

The mechanism that causes Shopify Payments and card-based processors to block CBD merchants simply isn't present in the Pay by Bank flow. There's no card network policy to trigger, and no issuer-level CBD restriction to encounter.

No chargebacks.

Pay by Bank transactions are authenticated directly through the customer's bank using their existing banking credentials. The card chargeback mechanism — which requires a card network to administer — doesn't exist in an open banking payment. Disputes are resolved directly between merchant and customer. The £15–20 fee per case and the operational overhead of evidence gathering disappear on Pay by Bank volume.

No rolling reserves.

The rationale for rolling reserves in high-risk card processing is to buffer against chargebacks. Without chargebacks, the rationale disappears. Fena doesn't operate a rolling reserve model equivalent to what high-risk card processors apply.

Same-day or instant settlement.

Pay by Bank via Fena settles same-day or instantly. Compared to the three-to-five-day windows typical of high-risk card processors, this removes the working capital pressure that delayed payouts create — particularly relevant for CBD brands managing stock purchases and supplier payments against incoming revenue.

Lower effective fees.

Because Pay by Bank bypasses interchange, scheme fees, and the risk premium built into high-risk card processing rates, the per-transaction cost is substantially lower. For CBD merchants currently paying 4–6% to a specialist card processor, the saving across meaningful transaction volumes is significant.

Account stability.

Without card network risk classification in the picture, CBD merchants using Pay by Bank via Fena don't face the category-level account risk that makes card-based processing for CBD inherently unstable. Your account isn't at risk because of your product category.

How Pay by Bank works alongside your existing Shopify setup

Fena's integration doesn't require removing your existing payment methods. Pay by Bank is added as an additional checkout option — customers can choose between Pay by Bank and any other payment methods you offer. Customers who prefer card payments continue to use them; customers who choose Pay by Bank get the bank-authenticated flow.

At checkout, the Pay by Bank flow works as follows: the customer selects Pay by Bank, chooses their bank from the list of supported UK banks, and is taken into their banking app to authorise the payment using their existing credentials. Once authorised, confirmation returns to Shopify automatically and the order is marked as paid. No card details are entered, no banking credentials are shared with the merchant, and settlement arrives same-day.

Adding Fena to a Shopify store is a straightforward integration through Shopify's payment settings. The process involves installing the Fena integration, connecting your business bank account, and enabling Pay by Bank as an additional payment method in Shopify's settings. It works alongside PayPal, card processors, and any other methods already configured.

Who this is for

Pay by Bank via Fena is built for UK Shopify merchants selling legal CBD products — including full-spectrum and broad-spectrum oils, isolate products, topicals, edibles, and capsules — who are either currently blocked by card-based processors or paying specialist high-risk rates that are eroding their margins.

It's also relevant for merchants who currently have a working card processor but want to reduce their chargeback exposure, remove rolling reserves, and improve cash flow predictability — without disrupting the portion of their customer base that prefers card payment.

Frequently asked questions

Can I sell CBD on Shopify in the UK?

Yes. Shopify permits CBD sales in the UK where products comply with applicable UK law — including FSA novel foods requirements for ingestible CBD products and relevant labelling standards. The payment challenge is separate from the product compliance question: Shopify Payments and most card-based gateways block CBD due to card network policy, not UK law. Pay by Bank via Fena provides a compliant payment route that isn't subject to those restrictions.

Why do CBD payment processors charge higher fees?

Card-based processors classify CBD as high-risk because card networks restrict the category, because chargeback rates in the sector tend to run higher than the standard retail average, and because the regulatory environment has historically been less settled. These factors translate into higher fees, reserves, and stricter terms. Pay by Bank removes the card network element from the equation, which changes the cost structure materially.

How does Pay by Bank help CBD merchants specifically?

It removes the card network infrastructure that causes the classification problem in the first place. There are no card network acceptable use policies to trigger, no chargeback mechanism to expose the merchant to, and no rolling reserve requirement. Settlement is faster and fees are lower than specialist card processors. The result is more stable, more cost-efficient payment processing for legal CBD merchants.

Does Pay by Bank work alongside cards and other payment methods?

Yes. Fena's Pay by Bank integration is additive — it appears as an additional payment option at checkout alongside whatever methods you currently offer. Customers choose their preferred method at the point of payment. You don't need to remove card payments or other options to add Pay by Bank.

What are the eligibility requirements for Fena's Pay by Bank?

Eligibility is based on legal operation in the UK and meeting Fena's compliance requirements — not on card network category policies. CBD merchants who are compliant with UK FSA requirements and relevant regulations are eligible, without the lengthy underwriting processes and risk-scoring associated with high-risk card processor onboarding.

What happens to existing chargebacks if I switch to Pay by Bank?

Pay by Bank eliminates chargebacks on future Pay by Bank transactions. Any existing card chargebacks in progress need to be handled through your current card processor — switching payment methods doesn't affect disputes already raised. Going forward, Pay by Bank volume carries no card chargeback exposure.