When major American payment processor T1 Payments abruptly ceased processing kratom transactions earlier this month, kratom vendors were devastated. Many vendors relied on T1 Payments to accept credit card payments at checkout. The sudden outage prevented their customers from placing orders — or at least using their credit cards to do so.
Thankfully, many vendors have since switched to other payment processors, and business has continued as usual. But one group of vendors has refused to let the matter go. Having suffered lost profits and withheld funds, they've united to take T1 Payments to court for alleged wrongdoing.
Diamond CBD Ltd is leading the lawsuit and filed an eight-count complaint against T1 Payments on May 14th, 2021. Their grievances include fraud, conversion, theft, breach of contract, breach of implied covenant of good faith and fair dealing, unjust enrichment and declaratory relief.
Diamond also accused T1 Payments of wrongfully withholding $649,311.73 USD in funds that have yet to be returned. That figure represents only one sum of money that T1 Payments has potentially withheld from a kratom vendor, with thousands of dollars more potentially at stake.
Because the financial industry frequently defines kratom as a "high-risk" business, kratom vendors often struggle to find reliable payment processors. Mainstream processors often discontinue services for vendors after discovering that the plant they're selling falls into a legal gray area. From there, vendors often scramble to reinstate credit card support at checkout, while others reluctantly forgo the option entirely.
But unlike other processors, T1 Payments specializes in processing transactions within high-risk industries. That made them a go-to option for many kratom vendors — at least, up until recently.
More updates regarding the T1 Payments lawsuit are expected to follow.