Accepting Payments at your Dispensary
2020 was a watershed year. A great many changes have hit Western society. In addition to political and economic changes, growing acceptance of smoking cannabis as a recreational alternative to alcohol has emerged. Still, the search for high-level merchant services and the ability to accept credit card payments is not an easy process. SecureGlobalPay can help guide you through the process and assist you with finding the proper payment processing solution for your Cannabis Dispensary business.
Cannabis and cannabinoid products are increasingly in demand. To meet the demand, dispensaries have opened up across the country. Whether they are selling flower from the cannabis plant (‘bud’), cannabidiol (CBD), or both, dispensaries are poised to address a growing need for proper merchant accounts and their providers. Legal Cannabis revenues in the US are projected to reach over $40 Billion dollars by the year 2025. Establishing a robust solution to accept payments for the cannabis industry has never been more important.
The fast emergence of the cannabis industry worldwide has proven a windfall. And yet dispensaries in the USA face a multitude of problems when they seek to accept payments. This is due to a complex tangle of contradictory laws at the state and federal level which seem to change often. True credit card acceptance remains the most sought-after method of payment acceptance for dispensaries. The ability to accept online payments through a payment gateway will always be the preferred solution.
Marijuana remains a controlled substance under the federal government. In the United States, jurisdiction over drug crimes is held at the federal level. This means that, in the USA, cannabis remains illegal at the federal level.
States, meanwhile, have been finding their own way to generate revenue where cannabis sales and use are concerned. As of this writing, 33 states, 3 territories and the District of Columbia itself have legalized medical cannabis. 11 states have decriminalized cannabis for adult-use and recreational sales.
Merchants running legal cannabis dispensary businesses face serious challenges where credit card processing is concerned. While cannabis sales may be authorized at the state level, cannabis payment services are very hard to come by as the substance remains a ‘controlled substance’. However, it is still subject to federal laws regarding payment processors.
Cannabis and Financial Law
According to a 2019 Gallup poll, 66% of Americans favor legalization of cannabis. But laws and institutions do not always keep pace with public opinion.
Federal law regulates banking and credit card activity. Because cannabis is still a controlled drug at the federal level, banks are hamstrung in their ability to process sales. Under the federal Controlled Substances Act, institutions may not engage in the commission of any cannabis-related crimes. Providing financial services can be recognized as a crime under this Act.
Credit card companies have been subjected to additional scrutiny. Their industry is subject to compliance standards which must align with federal government and banking laws. This makes the use of credit cards, in a retail cannabis point-of-sale transaction, illegal under federal law.
This often places dispensaries in a difficult position.
Dispensary 1.0 – Cash is King!
When dispensaries began opening in states that had legalized cannabis, merchants were aware of the limitations placed on card sales under federal law. Many opted to have ATM machines installed at their facilities.
With ATMs onsite, cannabis dispensaries could sidestep both banking regulations and the limitations of federal law. Cashless ATMs often come with additional challenges for store operators. However, these challenges, when often overlooked, provide additional security concerns with cash on hand.
Unfortunately, the current pandemic is also putting a crimp on the ATM/cannabis sales axis. There were two problems. The first was that word spread that it is possible to transmit the virus via an exchange of cash. The second was that, given the limitations and restrictions on movement imposed by the economic lockdowns, a great many ATMs stand empty or inaccessible. In an era of constant change, collection and delivery mechanisms for cash have been compromised and the need for something better has once again emerged.
Dispensary 2.0 – Cashless Cash Transactions
With ATMs empty and gathering dust in their dispensaries, cannabis merchants are reaching for a new cashless solution to facilitate sales.
Cashless ATMs or (Point of sale ATMs’) are becoming the solution of choice for marijuana dispensaries. Cashless ATM solutions enable merchants to reap all the benefits of a cash-only business while eliminating the risks associated with having cash on hand. They do this while avoiding the legal landmines of dealing with federally-regulated banks and credit card companies.
Cashless ATM systems work as follows:
- Merchants have a cashless ATM PIN pad installed at the register. (This looks no different from a standard PIN pad.)
- Customers bring their purchases to the counter and get rung up.
- Customers can then use their debit or credit card at the cashless ATM PIN pad to conduct a cash withdrawal from their account.
- A cash withdrawal is made to cover the transaction amount and a voucher is placed in the merchant’s cash register.
- Customers must make withdrawals in increments of $5. They will likely have to pay slightly more than a transaction is worth. They then receive a cash ‘change’ at the point of sale.
The Journey to Cashless ATM
Cashless ATMs are a relatively new payment methodology for dispensary payment processing . A few niche payment processors are currently specializing in dispensary sales. However, forming a relationship with a tried and tested payment solution provider is the preferred step to take.
SecureGlobalPay is such a Company.
Our experience with dispensary payment processing within the cannabis industry positions us well to target and meet your specific needs. Our legal division and team of designers are well-versed in the complexities facing the industry. Let us help you navigate the challenges posed by the DOJ, FinCEN and the Cole Amendment. Our solutions will keep you in the money and out of trouble with those who set and enforce the rules.
Apply with SecureGobalPay today. Allow us to learn about your business goals. Let us help you eliminate the obstacles by meeting them head on.