Kratom Merchant Account Requirements (Underwriting Checklist)
Key Takeaways
- • Kratom merchant accounts require extensive documentation due to regulatory uncertainty
- • Processing history, product testing certificates, and compliance policies are critical
- • Approval timelines range from 5-14 business days with proper documentation
- • Rolling reserves of 5-15% are standard for new your accounts
Securing a kratom merchant account requires thorough preparation and documentation. Unlike traditional retail, kratom businesses face heightened underwriting scrutiny due to regulatory uncertainty and banking hesitancy. This comprehensive guide outlines exactly what you need to get approved.
Essential Documentation for Kratom Merchant Accounts
Business Documentation
- ✓ Business license and state registration
- ✓ Articles of incorporation or LLC operating agreement
- ✓ EIN confirmation letter from IRS
- ✓ Voided business check or bank letter
- ✓ 3-6 months of business bank statements
- ✓ Processing statements from previous processors (if applicable)
Product and Compliance Documentation
- ✓ Third-party lab testing certificates (COAs) for all products
- ✓ Product labels showing compliant claims and warnings
- ✓ Age verification policy documentation
- ✓ Shipping restricted states policy
- ✓ Return and refund policy
- ✓ Terms of service and privacy policy
Principal Documentation
- ✓ Government-issued photo ID for all owners (20%+ ownership)
- ✓ Social Security numbers for background checks
- ✓ Personal credit authorization
- ✓ Proof of residence (utility bill, bank statement)
Common Underwriting Factors
Processors evaluate kratom applications based on several risk factors:
Positive Factors
- • Clean processing history with low chargebacks
- • Established business (2+ years)
- • State where kratom is explicitly legal
- • AKA Good Manufacturing Practice certification
- • Professional website with compliant content
Risk Factors
- • Previous account terminations
- • High chargeback ratios (above 1%)
- • Medical or therapeutic claims on website
- • Selling to states where kratom is banned
- • Poor personal credit of principals
Common Approval Blockers
These issues frequently cause kratom merchant account denials:
- Medical claims on website: Any language suggesting kratom treats, cures, or prevents disease will result in immediate denial.
- Missing age verification: Processors require robust age gates and shipping verification.
- Banned state sales: Selling to Alabama, Arkansas, Indiana, Rhode Island, Vermont, or Wisconsin.
- Incomplete COAs: Lab tests must show heavy metals, microbial, and alkaloid testing.
- TMF/MATCH listing: Previous placement on card brand terminated merchant files.
Expected Terms for your accounts
Frequently Asked Questions
What credit score is needed for merchant account approval?
Most processors look for a minimum 600 FICO score, though higher scores improve terms and reduce reserve requirements.
Can I get approved without processing history?
Yes, but expect higher reserves (10-15%) and lower initial volume caps. Demonstrating retail or wholesale experience helps.
How long does the underwriting process take?
With complete documentation, approval typically takes 5-14 business days. Incomplete applications cause significant delays.
What is a rolling reserve and how long is it held?
A rolling reserve holds 5-15% of transactions for 6-12 months to cover potential chargebacks. Funds are released on a rolling basis.
Do I need AKA GMP certification?
While not always required, AKA Good Manufacturing Practice certification significantly improves approval odds and may reduce reserves.
Can I process payments for kratom extracts?
Extracts face additional scrutiny. Full COAs showing alkaloid content and safety testing are essential for extract products.
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