The cannabis industry, just like any other industry, needs access to various supporting trades to conduct business. These businesses that serve the cannabis industry are referred to as ancillary services to the cannabis industry. And for these businesses, the cannabis industry can become one of their most lucrative clients.
Even though these businesses sell and offer legal products and services and do not “touch-the-plant” they are still considered marijuana related businesses, or MRBs. This designation makes them a high risk for the banks.
These businesses, like any other service, are just trying to lend their services to their customers. But, because of who their customer is, they have found themselves operating in what is considered the high-risk processing industry. They are quickly finding that obtaining and maintaining a high-risk merchant account is much harder than they realized. And the cannabis industry, as well as anyone who touches it, is a whole different ball game.
Ancillary businesses find it hard to accept credit card payments.
The first 2 months of the Trump presidency were tough for the ancillary cannabis industry. It has been three long years since banks dumped all businesses working with the cannabis industry from their payment processing platforms. This mass action left every ancillary business clamoring to find a way to accept payments from their purchasers.
Federal prohibition of cannabis continues to put a strain on ancillary businesses. Because their customer, or their target market, is seen as illegal, they are guilty by association. Anytime a majority of your income is derived from an illegal business, it is considered money laundering. This makes it quite difficult to find a merchant account and accept credit card payments.
Why is this? Banking institutions choosing to serve the industry are required to file special reports for all marijuana-related transactions called Suspicious Activity Reports (SARs). These reports are required for all ancillary businesses as well. This not only increases their workload and liability, but brings on additional Federal scrutiny. Monitoring and filing reports for every single transaction puts the bank at greater risk for having the Federal Reserve close their master account.
Strides have been made for accepting payments in the ancillary cannabis business industry.
As the cannabis industry continues to grow strides have been made where legality is concerned. There are now 33 states and 4 territories that have legalized the use, either recreational or medicinal, of marijuana.
Last year, the SAFE Banking ACt made history when the House passed it by a landslide on Sept 25, 2019 . This action made the bill the first stand-alone marijuana bill to be passed by a House floor vote.
In addition, we are still advocating for the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act. The bill would have marijuana removed from the Controlled Substances Act. This will take some time primarily due to the number of committees that need to review the act before it can come to a full House vote. However it continues to make slow but steady progress. There is still a lot of work to do on both of these fronts as the Senate continues to drag its heels.
There still remains a disconnect between Federal and state laws surrounding ANY business that involves cannabis. Regardless of whether the business works directly with the plant or not. Time will only tell if we can begin to bring this disparity closer together.
Ancillary cannabis businesses are higher risk merchant accounts.
However, unlike 3 years ago, we do have options for businesses that are servicing the cannabis industry to accept payments.
Many of these types of businesses have been in operation for quite some time, long before they started serving the cannabis industry. They have been accepting payments and have experience with traditional low risk credit card processing options. But as the cannabis industry and businesses continue to flourish, more and more ancillary businesses have begun to service their needs. This has turned a seemingly innocuous business into a high risk.
While it is true that they can be treated unfairly, just about anyone who is related to or dealing with the industry can get a merchant account and legally accept credit cards when they have an experienced high risk merchant provider.
Services like cannabis lawyers, consultants, trade show organizers, real estate agents, marketing and PR, T-shirt makers, pipe stores, vaporizers, packaging manufacturers, and just about anything else associated directly with the industry can accept credit cards legally and transparently if they know the right way to go about it.
How to find the right merchant account provider for your ancillary cannabis business.
When you're in this kind of industry, you can't just sign up with any Tom, Dick, or Harry offering credit card processing services. First of all, there are many payment processing options that simply will not take your account. Other so called “high-risk” credit card processors don't truly have the in-depth knowledge of the industry required to grant a merchant account that is reliable.
Navigating the regulations between Federal and State laws where ancillary services are concerned is a difficult job. Many banks feel that they can't abide by the Federal and Card Brand laws and still provide service to these industries. This is where having a high-risk merchant service provider with in-depth knowledge and experience will lend to obtaining and keeping your account.
It is more important than ever to be picky about who you choose as your high-risk merchant account provider. IF you want your businesses to be successful you need a merchant account you can rely on.
To achieve this, you need a merchant service provider who has extensive experience with high-risk merchant accounts. But you also need someone who has been working with the industry since the beginning. This way you can be sure they understand the cannabis industry itself and the unique problems it provides for accepting payments.
We have been actively advocating for access to fair banking and payment processing services for the industry since 2006. During that time we have become one of the few merchant account providers who have the experience and in-depth knowledge of the regulations surrounding accepting payments in the cannabis industry. Between our strong banking relationships and innovative technology, we aim to make being in a compliance-heavy industry easier to manage.
Accept credit cards for ancillary cannabis related business.
We have worked hard to bring transparent and dependable merchant services to marijuana related businesses and all ancillary services. Because of that hard work, we are able to offer our clients a compliant cannabis related, domestic merchant account for accepting payments. And, we can work with any cannabis related business that is not plant touching.
In the past, to get a domestic merchant account you would have to “clean up” your website to get approved for the account. Not any more. This is a compliant merchant account. You will not be asked to try to hide what you do and who you work with. Now you can get a fully transparent, domestic merchant account you can rely on.
The best part is, it’s not going to cost you an arm and a leg. There are no set up fees, and in most cases, no reserve is required.
We can even work with merchants that have been terminated or added to the Terminated Merchant File (TMF). As long as the business’s termination was solely due to working directly with the industry.
We provide a wide range of gateways to choose from and can integrate with most eCommerce and POS platforms.
Did I mention this is a DOMESTIC merchant account? You will not be using an offshore or check processing solution. But keep in mind that these are great add on, or back-up, solutions to couple with your main merchant account.
Finally, you can focus your time on running your business and supporting your all-important customers. Instead of worrying whether your merchant account will get shut down, or how and where you will be able to find another one, you can forget about it. Finally, the last merchant account partner you will ever need for your business.
If you want to learn about accepting card payments for plant-touching businesses you can find more information here.
Bankcard International Group is a proud supporter of the cannabis industry. We have many opportunities and solutions for cannabis-related business merchant accounts, more than any other merchant service provider. Give us a call today to get your questions answered. Or, click the button below and one of our ETA-Certified Payment Professionals will consult with you as to the best solution for your ancillary cannabis service.