The Cannabis industry has no doubt made a permanent impact upon the national economy. There are currently 47 states with legalized cannabis, in one form or another, and still we are trying to gain access to banking and payments for the industry.
As the cannabis industry steadily plows forward it is likely there will be even more significant changes to the industry in the coming year: mergers, acquisitions, new bills introduced in Congress for access to fair banking on the federal level as well as through state legislation.
At this juncture I don’t think I have to go into depth about the fact that marijuana is still illegal on the federal level, or how that is the source of many of the problems the FDIC insured banks and networks over which our payments travel face.
We all know the difficulties on the federal level for financial services serving the cannabis industry, and to make matters worse laws and regulations not only vary for each state but are continually changing in each state. It is a lot to keep up on and definitely creates a legal and operational nightmare for everyone involved.
There has hardly been an industry that has morphed so quickly and so continuously. With so many changes happening in the sector every time you turn around it is hard to keep up with which options are currently available for accepting payments in the cannabis industry.
Depending on the type of marijuana business looking to accept payments, it is important to know which options are best suited to each type of merchant or business model. Today were going to go over the three best options available right now for accepting cannabis payments.
The 3 best options for accepting cannabis payments today.
Creme de la creme:
Credit card processing is by and large the unicorn of payment processing for the marijuana industry. In a testament to how quickly things change in this industry, as recent as a few months ago it would be laughable to think one could get a legal transparent, domestic credit card processing account for a cannabis related business, but that is exactly what can be done.
This is option, however, is reserved or retail (card present) transactions only so this is a great option for dispensary or delivery companies to accept credit card payments for face to face cannabis sales.
Domestic processing not only benefits the merchant but the customer as well. Domestic account affords the merchant with faster funding into their bank account as opposed to the traditional wire transfer with offshore high risk processing. No need to set up incorporation in a foreign country. U.S. based customer service to better support the merchant. Domestic transaction origination means fewer declines for the patron.
Merchants are allowed to pass a portion of the cost of the transaction fees on to the customer. Due to compliance challenges and the high risk nature of the industry it is common for fees to be higher than traditional credit card processing (to say the least), this benefit is made available to merchants in an effort to keep it cost effective for the cannabis company to accept credit card payments and continue to offer this option to their customers.
Mobile terminals available to delivery drivers enable them to take payment on the spot while help to greatly decrease the amount of cash that delivery drivers would have to transport.
The cashless ATM option, also often referred to as “point of banking”, has been operating seamlessly for dispensaries and delivery for 8 years now. Cashless ATM system was born from the need to provide a payment solution to legal cannabis businesses despite the lack of support from financial services.
Reduce the amount of cash housed on premise due to the fact that this “ATM” does not spit out cash- instead the customer is issued a receipt or ‘chit’ for the amount withdrawn then presents this to the cashier who uses it to complete the sale.
Lowers the amount of cash the dispensary has to store in it’s safe which can lead to less opportunity for burglary of that bankroll. And also decreases the huge cash deposits made to the bank that cost marijuana businesses so much money.
Next to zero cost payments option for the merchant because the customer pays the transaction fee. Quick funding of transactions right into merchant business bank account.
Enrollment process is quick and painless, businesses can be up and running in no time.
Convenient and discreet! For customers who do not always have cash on them, this system allows them to use their debit card to pay for their products but won’t show up on their statement at their bank as to the nature of the purchase.
Best supporting actor:
ACH payment processing is still the best option for collecting payments to run alongside credit card processing. I know, I know you think payment by checking account is sooo 1980’s but this is still one of the best ways for a high risk business to ensure their ability to accept payments and continue operations in the event something goes wrong with their merchant account.
Best for eCommerce and phone in orders where you are completing transaction without a card present.
Lower costs, quicker funding more payment options to satisfy various customer’s needs. ACH payment transactions only require a flat fee which is significantly lower than the notoriously high fees associated with credit card processing-even moving a portion of your processing to this type of payments avenue can a have a substantial impact on your bottom line.
Super fast funding directly into merchant’s business bank account helps to balance cash flow for the business.
Quick underwriting and implementation- setting up ACH payments is one of the quickest ways to start accepting payments fast, even while you wait for merchant account approval for accepting credit cards.
Piece of mind – cash payments are not an option when all sales happen without any face to face interaction, if your merchant account for accepting credit cards were to be put on hold or shut down you still have an option that steps in and keeps your sales flow on track.
Until congress takes significant action towards lifting banking restrictions for allowing banks to operate within the cannabis sector we will continue to do the best we can to offer the most transparent, reliable payment options available today with a focus on helping cannabis business’ continued success and forward momentum.
Especially due to the volatile nature of the cannabis industry we know it is imperative for merchants to partner with a knowledgeable and ethical merchant service provider. At Bankcard Brokers we command a deep understanding of processing payments for high risk companies with special attention to the unique concerns of the cannabis industry specifically.
We continue to be a proud supporter of the cannabis industry and strive to help bring fair, transparent and reliable access to many of the financial services other companies take for granted. Through our hard earned relationships we are able to provide our merchants with the most innovative solutions while paying special consideration to the limitations of accepting payments in the cannabis industry. Our ETA Certified Payments Professionals are especially capable of guiding merchants on how to suitably accept payments and thrive in an ever evolving industry.