Card Payments For the Cannabis Industry

POSTED BY: Rhett Baylies
Cannabis businesses struggle to find a transparent way to accept credit cards - here is the solution!

Be weary of anyone who claims that you can accept credit cards legally at your cannabis dispensary.

For the Cannabis Industry the ability to accept credit cards is essential from many standpoints.

However, due to Federal regulation, unclear banking guidelines, and wildly different local regulation there is NO legal solution for the cannabis industry to accept credit cards (at this time).  The Merchant Doctor does have credit card solutions for ancillary services to the Cannabis Industry but for any business dealing directly with any form of the marijuana plant there is not a legal solution to accept credit cards at this time.  Any dispensary or delivery service that is accepting credit cards at this time is doing so illegally putting not only their business but themselves at risk of federal charges or at the very least being placed on the TMF list meaning that when federal regulations do change they will be unable to accept credit cards - ever.  Under the current legislation and card processor (or acquiring bank) that discovers a marijuana related business accepting credit cards under false pretense - they are required by law to close the account and report that business to FinCEN.

So what’s the big deal?  Cash is King in Cannabis, right?

Unfortunately not in today’s business environment.  Not only do customers/patients expect to be able to pay by credit card but for many patients who are a limited or fixed income using a credit card is the only way they can get access to the medicine they need, when they need it.  Most business owners that are involved in the Cannabis industry are truly passionate about promoting and legitimizing the industry and part of that process is winning over the public’s perception of Marijuana as a business.  How does being able to accept card payments help that process? 

First, and foremost, it addresses one of the biggest issues facing communities and legislators when it comes to the cannabis industry - safety.  Safety, not only for the business and its patients but for the community as a whole.  The proof is in the headlines of local and national news every week as dispensaries, delivery drivers, and their patients are getting robbed, sometimes violently.  As you know you are being targeted by these criminals because they know that there is a large amount of cash on site and in the hands of your patients.  These kind of headlines are extremely detrimental to the health, public perception, and growth of the industry. 

Another issue is that cash sales can be difficult to track and document not only for maintaining control over your business but to make sure that you are maintaining records that meet your local compliance regulations. 

Finally, being able to accept card payments is proven to increase sales and customer return visits making your business more profitable!

How can you legally make your cannabis business safer and more profitable through accepting card payments?

Simple!  Until federal banking regulations clearly allow not only for the cannabis industry to accept credit cards but to be allowed a bank account at a federally backed bank the only legal way to accept card payments with a cashless ATM.  Also known as Point of Banking, a cashless ATM is the ONLY legal solution (at this time) for the cannabis industry to accept card payments. 

Why is it Legal for the Cannabis industry to accept Debit Cards and Not Credit Cards?

There are a few reasons for this but for the sake of not boring you with the intricacies and agencies involved with accepting a credit card payments lets look at it like this.  An ATM Card payment runs along independant rails and is considered for all intensive purposes a cash payment.  A Credit Card transaction has to run from your place of business through your processor, then onto the Interchange System so it can be directed to the card issuing bank where it is approved or not and sent back through the system.  A credit card payment is actually like a micro loan issued by the card issuing bank, therefore, placed under the scrutiny of Federal law - which as we know is vague at best when it comes to banking and Marijuana, a federally controlled substance.

How Can a Cashless ATM benefit your cannabis dispensary, delivery service, or Cannabis B2B business?

Simple!  I has been proven that customers who are empowered to pay for goods and services with plastic spend more (23% more as a matter of fact!), they come back more often, and they purchase more impulse buys (think lollipops, pipes, papers, you name it). 

Now let’s talk about safety.  Whether you are an established location or a new cannabis business looking for a location a cashless payment method should be an integral part of your business plan and proposal to show that you can operate an establishment that will not attract thieves, keeps your employees and patrons safe, and that it can operate in a transparent fiscally responsible way. 

Finally there is the cost!  Unlike with a traditional merchant service account with a cashless ATM there are no complex rate structures and compliance issues to pay for.  A cashless ATM is actually much less expensive than a traditional merchant account!

How does a Cashless ATM work?

Most cashless ATMs work exactly the same although the pricing and service can vary.  This makes it very important to only work with an established merchant service provider like The Merchant Doctor!  The process is simple and seamless - when a patron comes to your counter to purchase their medication they will swipe their card and enter their PIN number (just like at any other retail store) and make their purchase rounded up to the nearest $5.  Then you will provide change for the difference as if it were a cash back transaction.  The reason for the $5 increment is that the ATM debit network will only support ATM functionality in $5 increments (unlike a PIN based transaction that goes through the interchange system).

How much does a cashless ATM system cost for your cannabis dispensary?

In general the only up front cost you will have is to purchase the encrypted terminal and PIN pad combo directly from the processing bank ranging from $450 for a standard unit to over $700 for a wireless unit. 

Then, just like with any ATM there is a convenience fee charged per transaction which generally totals around $3.00, however, I have seen some processing companies trying to charge up $7!.  If you are using a wireless unit (delivery services for instance) you will need to pay for wireless network access which varies from $25 to $35 depending on your cashless ATM provider.  Other than that the only cost you will have is monthly fee - these can vary greatly but will range from $8 to $35 a month.  That’s it!  Simple Pricing and all the benefits of empowering your patrons with a cashless payment method which is good for your business, for safety, and the professional image that the cannabis industry deserves.

The Merchant Doctor provides the most comprehensive network of services for the cannabis industry from banking, leasing, to cashless ATMs.  If you would like a no bull consultation for your business simply write CONTACT US!

About the Author: Rhett Baylies

After over 17 years in the service industry not only as an employee but business owner and corporate manager Rhett decided to start his career in the Payment industry with the vision of providing good honest service at a fair price. Rhett now applies his years of service focused business to his daily routine and looks forward to revolutionizing the way you look at your processing statement for many years to come.

Rhett Baylies's avatar
Bryan | May 05 2015

we looking for partners who is willing to refer merchant direct to our gateway , high margin split program available .
With our strong connection to acquiring banks , we take care things more and trustworthy.

Comment Here

The Merchant Doctor Will Not Share, Sell, or Compromise Your Contact Details. Really!

Are you Human? CAPTCHA ID:

Please enter the word you see in the image below: