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Domestic and Offshore Payment Processing for Cannabis

by Kimberly Baylies on November 22, 2019

Domestic and Offshore Payment Processing for Cannabis

The Cannabis industry continues to make a significant impact on the national economy. From job creation to its overall economic impact, it is an industry currently growing at a rate of 21% annually. And yet, they are still unable to find cannabis payment processing that is reliable. They have done this while only being able to accept cash as payment in a day and age of credit cards and mobile wallets. 

I think we can all agree that cash-only is not necessarily the best way to run a business. Nor appeal to your entire intended market. And it isn't an option at all if you run an E-commerce site. Given the limitations, there are really only two truly reliable ways of accepting payments in this realm.

In order to accept Cannabis payments, you don't have to go offshore.

The industry began through change and is continuously morphing as it grows and presses towards its place in the world. There have been mergers and acquisitions, states continue to join the legalization movement, Bills are being introduced into Congress, as well as through state legislation, pushing for access to fair banking on the federal level. 

There are now 47 states with some form (medical) of legal cannabis. Still, businesses find themselves struggling to gain access to banking and payment processing. 

To make matters worse, laws and regulations not only vary for each state but are continually changing within each state. It is a lot to keep up on and definitely creates a legal and operational nightmare for everyone involved.

We are all aware of the difficulties at the Federal level for financial services hoping to serve the Cannabis industry. I don’t think I need to go into detail about the fact that Marijuana is still illegal on the Federal level. Or, that this conundrum is the source of the many problems faced by the networks through which our payments travel. 

Cannabis Payment Options - One for dispensary and delivery, one for eCommerce.

With so many changes happening, it is hard to keep tabs on exactly which options are available, if any. Fortunately, there are two pretty reliable options currently available for accepting payments in the Cannabis industry.

The type of options available depends on the type of marijuana business looking to accept payments. It is important to know which options are best suited to the type of merchant or business model wanting to accept cannabis payments. 

Today we are going to go over the only two viable domestic options available right now. One is best for retail, card-present transactions for a dispensary or delivery company. The other is best for eCommerce transactions where it is a card-not-present transaction.

Point of Banking, formerly known as “cashless ATM”

This first option serves both dispensaries and delivery companies where there is a face to face transaction, or what is referred to as a “card present” transaction. 

Cannabis payment processing

The cashless ATM is an option that is not in any way new.

 It has been in operation for 20 years and was born from the need to provide services to the loan industry. Recently it has become the most reliable way to successfully allow legal cannabis businesses to accept payments. Despite the lack of support from financial services, Cashless ATM has been successfully serving cannabis merchants for 8 years.

While this sounds like an ATM as we know it, it doesn’t quite work the same way. With Point of Banking, the customer simply uses his or her debit card at the POS or terminal at the time of purchase. The transaction is rounded to the nearest $5, and the budtender dispences any change to the customer. 

The old cashless ATM was more like a freestanding machine in the dispensary. People had to know how much they wanted to spend (like a real ATM) and request that amount. With this new iteration of the technology, customers are able to complete a transaction much in the same way they would in any store.

Why cannabis merchants and delivery companies love to use Point of Banking as a way to accept cannabis payments:

  • Reduces the amount of cash housed on the premise or being carried in a delivery truck. Which in turn helps to reduce the incidence of theft.
  • Reduces costs to accept payments since 100% of the fees can be passed on to the customer for using a card.
  • Reduces the number of huge cash deposits most marijuana businesses make which costs these businesses so much in fees. 
  • Quick funding directly into the merchant business accounts allowing for better control over cash flow.
  • Enrollment is quick and underwriting is fairly painless, businesses can be up and running in no time.

Point of Banking is both convenient and discreet for customers who do not always have cash on them. Before, customers would be required to make multiple withdrawals if they bought more than they initially thought. Point of Banking at the POS allows for spontaneous purchases and can actually cause a business’s sales to increase. Since the bank statement does not show the nature of the purchase, this system allows customers to use their debit cards with confidence. 

eCommerce payments for cannabisEcheck Processing-The other-best option available for accepting cannabis payments.

For Ecommerce, Echeck Processing is the best option. Reliably accept payments for online or phone orders where you are completing a transaction without a card present. 

You might be thinking “this is so old fashioned”..., but paying by Echeck is still one of the best ways for a high-risk business to ensure their ability to accept payments.  Echeck processing allows for uninterrupted operations in the event something goes wrong with your high-risk offshore merchant account. And, there are many benefits for both the customer and the business.

  • More payment options = more customers. An Echeck is a very secure way for a customer who may not have a credit card to still make their purchase with their bank account. 
  • Lower processing fees for the merchant. Echeck processing fees are one flat rate which is significantly lower than the notoriously high fees associated with (offshore)  credit card processing.
  • Move just a portion of your transactions to this type of payment and you could see a substantial impact on your bottom line.
  • Superfast funding into the merchant’s business account means no waiting forever for transaction funding to come through.
  • Quicker deposits give businesses more control over cash flow.
  • Quick underwriting and implementation. Accepting Echecks is one of the quickest ways to start accepting payments fast, ever while you wait for merchant account approval.

Accepting Echecks gives Ecomm merchants piece of mind. Cash payments are not an option when all sales happen without any face to face interaction. What if every other option you are using for accepting payments were to be put on hold or worse get shut down? With Echecks as a back-up, your sales flow stays on track. And you're able to offer your customers an option for getting the products they need.

Cannabis payment processing is much like walking a tightrope.Don't take uneccesary risks to accept card payments for cannabis.  Cannabis Merchant Services

Until Congress takes significant action towards lifting banking restrictions for financial institutions allowing them to legally operate in the cannabis sector, these are the best options for the businesses who are part of the movement. 

In the meantime, Bankcard International Group will continue to do the best we can to offer the most transparent and reliable payment solutions available today. Our focus is on helping cannabis businesses’ continued success and the industry's forward momentum.

The cannabis industry in an especially volatile industry. It's imperative for merchants to partner with a knowledgeable and ethical merchant service provider. After 20 years in high-risk processing, Bankcard International Group (BIG), commands a deep understanding of processing payments for high-risk companies. Over the years, we've learned to give special attention to the unique concerns of the cannabis industry specifically.

We continue to be a proud supporter of the cannabis industry, whether it is plant-touching or an ancillary business model. We strive to help bring fair, transparent and reliable access to many of the financial services that other companies take for granted. 

Through our hard-earned relationships, we are able to provide our merchants with the most innovative solutions. We forged these partnerships 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 this ever-evolving industry.

To take advantage of our educated advice and industry-leading payment options give Bankcard International Group a call today. Find out what it is like to “Experience the BIG Difference!”



Topics: Cannabis, cannabis dispensary, cannabis delivery