WAAVE
A High-Tech Compliance Shield for Wellness products

Imagine you’re a CBD merchant, perpetually under the intense scrutiny of banks. It goes beyond saying you will be adhering to more than just Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations but regulations across federal, state and even city levels.

Any accidental transgression during a sale could terminate your merchant account and place you on the Mastercard Alert to Control High-risk Merchants (MATCH) list. Such granular control is essential, but managing its nuances while simultaneously operating the business is complex.

This is where WAAVE, a compliance payment processing technology company is making a significant difference with its proprietary software suites—WaaveCompliance and WaaveComplete.

WaaveComplete is a compliance-as-a-service offering bundled with a payment solution where its partner banks provide a merchant account for the clients. In this case, merchants are using WAAVE’s full tech stack. For merchants already having an external partner merchant account, WaaveCompliance integrates with their existing payment account and precisely maps their entire sales ecosystem. This is ideal for enterprises with significant sales volumes that are satisfied with their current payment processors but need to mitigate the risk of substantial fines—like the $25,000 penalties for legal non-compliance or the feared food and drug administration (FDA) warning letters.

Silvana Carpanelli-Hayes, CEO highlights the company’s motto. “Our technology safeguards merchants, buyers and financial institutions from legal violations across various jurisdictions. We do the compliance heavy lifting for them so they only have to worry about growing their business.”

Once the model is integrated into the merchant’s tech stack, WaaveCompliance deep dives into their website to monitor in-cart compliance ensuring disallowed products are not sold. It scrutinizes over 35 data points such as verifying buyers’ identity, age, shipping location and the specifics of what they are buying—at the transactional level for every purchase. It gives merchants a green signal on what they ‘can’ and ‘cannot’ do for every transaction respecting the specific legalities shadowing the products. If a problem arises with specific items that cannot be shipped to the location, WaaveCompliance will prompt to either remove these items or proceed to checkout with only the approved items.

For instance, if an item like a vape—which requires the buyer to be at least 21 years old under the Tobacco Tax Act—is in the cart, WaaveCompliance verifies the age and tokenizes and stores this information securely on the user’s profile, further initiating the purchase. This assures partnered banks that compliance is met effectively, reducing their reliance on merchants to maintain standards independently.

The success is rooted in WaaveCompliance’s 24/7 monitoring capability, which assures merchants that infractions are preemptively prevented and blocked from payment processing. This proactive approach contrasts the traditional model, where a merchant account is established and behaviors are only spot-checked after six months, often leading to regulatory shutdowns.

As products evolve through new introductions or revisions, WaaveCompliance automatically updates legal disclaimers and age gates. Managing up-to-date certificates of analysis (COA) is further streamlined. The system alerts merchants when their COAs are nearing expiration and facilitates updates to ensure no product is sold with an expired certificate. With partnerships in place with top Drug Enforcement Administration (DEA)- approved labs, it handles sample testing and integrates results directly into the system, easing the compliance burden for merchants.

By preemptively addressing potential infractions, banks’ underwriting teams work more efficiently. Where a bank would need a huge number of underwriting personnel—on the order of one per 100 merchant accounts—WAAVE makes it possible to handle this complex compliance with a much leaner team. This change is particularly game-changing. They no longer have to rely solely on merchants to maintain compliance; instead, they can oversee compliance in an almost omnipresent manner, automated and 24/7 through WAAVE. The ultimate goal? To onboard new merchants and continue servicing them indefinitely without the threat of shutdowns. When issues arise with a merchant account, WAAVE provides a comprehensive audit. This audit details inventory additions and underwriting decisions, including approvals and rejections. It also logs each blocked transaction, illustrating the relevant legislation at the time and how the system responded to each purchase attempt. This functionality enhances the underwriting team’s efficiency, allowing them to perform their duties more effectively and swiftly.

Our technology safeguards merchants, buyers and financial institutions from legal violations across various jurisdictions. We do the compliance heavy lifting for them so they only have to worry about growing their business

In a recent collaboration with a leading U.S.-based CBD company offering broad and full-spectrum CBD products, compliance with the Farm Bill was paramount. Their products, containing up to 0.3 percent THC, had COA confirming adherence to regulations. However, the company initially faced challenges preventing shipments to areas with strict zero-THC policies, such as buyers ordering CBD for delivery to states like Kansas, where it is prohibited. Recognizing the legal risks, the client restructured their compliance approach by implementing WAAVE's proprietary technology. This allowed the client to proactively monitor and block transactions destined for prohibited areas. Resulting in the client successfully navigating the audit without penalties, showcasing how the technology acted as an invisible shield behind each transaction, effortlessly ensuring compliance.

Behind such success stories is the ‘Powered by WAAVE’ seal, tagged on the merchants’ website. It’s the emblem of assurance that merchants enter a marketplace where compliance never plays second fiddle. Say goodbye to items that don’t measure up with the regulations with WAAVE as a discerning eye over your inventory and transaction, ensuring that every product listed not only complies with the law but elevates your brand.