Many states in the US have legalized cannabis for recreational or medical use. To help maximize revenues, many of these dispensaries now use cannabis payment processing solutions over cash payments. Dispensary ATM Services are used when cannabis dispensaries use point-of-banking technology and cashless ATMs to accept these cashless payments.
Colorado started the whole movement in 2012. By 2016, 4 additional states hopped on board, making it a total of 8 states.
On Election Day in 2020, New Jersey, South Dakota, Arizona and Oregon voted to legalize recreational marijuana.
Presently, 18 states and Washington D.C. have legalized marijuana for people over the age of 21, while 37 states allow the use of cannabis for medical purposes.
This shows that a majority of Americans have authorized access to cannabis, whether recreationally or medically.
But surprisingly, federal law continues to classify this drug as an illegal substance.
This law is in line with the Controlled Substances Act of 1970 which categorizes cannabis as a Schedule 1 drug and controlled substance with a high probability of abuse and no sensible medical use.
The Cannabis Industry is Massive
Despite the big controversy surrounding the cannabis industry, over $92 billion was still realized in marijuana sales in 2021, a figure up by 30% from 2020.
According to projections, the cannabis industry is expected to hit $160 billion by 2025, a development that has led to another surge of legalized dispensaries opening up dispensaries across the country.
There are over 8,000 cannabis dispensaries in the United States, with Colorado having the largest number in the country.
Without question, the cannabis industry is one of the fastest-growing businesses in America today, but credit and debit card transactions pose a huge challenge because federal law is at loggerheads with state law.
This is one of the main reasons why cannabis dispensary payment processing can be a problem.
Dispensary ATM Services – Point-of-Banking
However, there is a way around this problem by using dispensary atm services or cashless ATMs (automated teller machines), that allows a person to make a cannabis purchase without withdrawing any physical cash.
This is how it works: when a cannabis customer makes a purchase of $50, the cashless automated teller machine dispenses a voucher.
The customer presents the voucher to a cashier who goes ahead to deduct money for the purchase, the appropriate tax, and a fee for using the ATM.
These cashless ATMs are ideal for CBD companies, medical marijuana clinics, cannabis dispensaries, and other high-risk businesses that struggle to accept payments for their products and services through traditional merchant channels.
Why Cashless Dispensary ATM Services?
A preference for cashless atm payments and point-of-banking services, in general, has risen mostly due to the COVID-19 pandemic. This, in addition to added security by not storing too much cash on the premises, is another reason to invest in dispensary ATM services.
These point-of-banking solutions called cashless ATMs are far smaller than customary ATMs. They are usually located in strategic areas where customers can easily see and easily use them.
A customer swipes or inserts a bank card into the terminal and enters a pin number just like a regular ATM.
The customer then chooses the amount for the withdrawal but gets a receipt instead of cash to pay for the purchase.
The funds will be deposited into the merchant’s account within 48 hours. This is quick because there is no batch processing involved and so transactions are processed almost immediately.
Also, depending on how much the customer withdrew, charges will be deducted and the balance returned by the merchant to the customer.
In other words, if a customer withdrew $20 and purchased a product worth $16, the merchant gives the customer $4.
Benefits of Using Cashless Dispensary ATM Services
Despite conflicting restrictions in the industry, cannabis dispensaries continue to sprout across the country in record numbers.
With the passing of the Safe Banking Act offering legal cover to banks, there is the likelihood that more banks will start to process cannabis payments too.
But irrespective of this development, cashless ATM services will most likely remain a top choice for dispensaries because it whittles down their chargeback ratio and fraud cases.
In addition, cashless ATMs help merchants avoid unreasonable rates and fees often associated with credit card processing merchant accounts.
Cashless ATM transaction costs are charged to customers in form of convenience fees. This often covers the price of using the service and can save merchants hundreds and possibly even thousands of dollars every month.
Cannabis dispensary owners also have a chance of getting easily approved for a cashless ATM without the hassles usually associated with opening a high-risk merchant account.
The installation of a cashless ATM is easy, all you have to do is plug & play, and you are ready to go. The transaction process for the customer is just as easy and entails entering a pin number as well as confirming the transaction.
Cashless payments are discreet and show up on banking statements as ATM withdrawals. There are often no major paper trails to suggest that an individual made a purchase at a marijuana clinic or cannabis store.
This ATM dispensary service is often the perfect point-of-banking solution for merchants that have ended up in a MATCH/TMF listing and are struggling to open another merchant account.
These cashless automated machines offer a safe and secure way to reduce cash flow and handle business transactions without having a sizable amount of cash around. This saves merchants the hassle of continuously filling them up and hiring security to protect their tangible assets.
All terminals have real-time reporting capabilities and most of them come with a lifetime warranty.
Applying for a Cashless Automated Teller Machine
Do not submit an application to the first cashless ATM provider that you come across. Do your research and always feel comfortable with who you are doing business with.
When you contact cashless ATM machine providers, find out more about their services. And look out for honest reviews from previous customers about what they have to say about these providers and their machines.
Let these tips help you make the ideal choice before you send in an application for your cashless ATM placement.
When an ATM machine provider receives your completed application along with the relevant documents, it usually takes a maximum of 5 days to approve and program the terminal.
Once the approval and programming process has been completed the cashless automated teller machine will be shipped.
Once received, business owners will be able to start accepting cashless payments as soon as the terminal is installed. All it takes is power and an internet connection.
Last Words on Point-of-Banking
Even as there are a growing number of states that have legalized marijuana for recreational and medicinal purposes, take nothing for granted.
Getting a license to run a dispensary is different from obtaining permission for dispensary ATM services.
Ensure that you have the necessary permit to legally operate a marijuana or cannabis dispensary service.
It is imperative to visit the state health department in your area and obtain a marijuana registry card to offer this service legally.