In many instances, legal Cannabis businesses have resorted to using “Cashless ATMs” to process the payment of Cannabis deliveries and payment of products. This could be coming to a close after recent communication from merchant service accounts including VISA who has stated that this is a “misuse” of the service and would be cracking down on this particular method. This compliance document has put dispensaries on high alert as we move forward in this industry. This seems to be a courtesy warning before crackdowns begin.
Fortunately, this will not send every dispensary back into cash operations as there are many compliant operations/companies offering a safe alternative with online payments that will enable them to operate like a fully legitimate retail business.
As Cannabis business owners prepare for the future it may be a good idea to follow along with compliancy footsteps in order to continue progress with no disruption while also enjoying the long-term advantages of adopting modern compliancy operations. This will serve to benefit all parties including the industry as a whole as well as the consumer and retailers.
What are the benefits of using digital payment partners?
Although both credit cards and debit cards are off-limits for the cannabis industry, retailers can still offer bank-to-bank transfers commonly referred to as ACH. In recent years mainstream companies are offering bank-to-bank digital transfers i.e. AEROPAY making transactions much easier and efficient.
This not only sorts out the risk involved with cash transactions but also enables dispensaries to provide seamless retail experiences. Not all platforms are the same so when signing on retailers are encouraged to do their part to make sure it meets all standards required by state and Federal while meeting their specific needs. In choosing one of them to work with there are several factors to key on in order to make the right decision for your company.
- Find someone who works with a trusted Cannabis financial institution such as Safe Harbor Financial that follow strict reporting guidelines outlined by the Financial Crimes Enforcement Network (FinCEN)
- Partner with platforms that offer extensive fraud and anti-money laundering transaction observation.
- Platforms that monitor these types of transactions are much less likely to allow their clients to fall into misconduct of payments etc.
- Find a platform that offers constant integration of POS systems and e-commerce abilities. These can help reduce the factors of human error.
“The biggest killer on the planet is stress, and I still think the best medicine is and always has been cannabis.”
Willie Nelson
What is the benefit of going cashless?
Running a Cannabis business can have plenty of potential risks as with any other business. Relying solely on cash transactions can bring about safety concerns for staff and owners. Transitioning to a digital form of payment not only improves dispensary security but also reduces the possibility of employee theft which can range from stealing cash to giving away product/s.
Any interruptions in the payment process have found that many consumers will abandon the “cart’ due to difficulty checking out or completing the transaction.
It has been widely known that online cannabis orders often outsell in-store retail transactions. It has been seen among retailers that online orders can increase orders on average by up to 19% among many retailers.
It has been stated through research that 60% of consumers are now using a digital wallet to make most of their purchases eliminating cash transactions throughout most of their daily purchases.
Giving customers this ability will create repeat customers as well knowing they have the ability to pay without having to retrieve cash or deal with change.
How are digital payments helping to set a standard for the regulated industry?
Over the past 10 years, the industry has adopted a number of temporary solutions to help overcome both the anticipated and unforeseen regulatory and consumer challenges. However, as the industry evolves into more of an accepted industry, it will be necessary that businesses have tested platforms to ensure compliance moving forward.
This also sets things up for timely payments between all parties involved during the process making things more efficient.
One big factor with digital payment forms is that while we optimize this in the industry this will establish new and efficient transfers of funds standards that do not currently exist on the mainstream level.
It is a must that we adopt standard operating protocol to streamline with global business practices establishing credibility in the industry.
Gaining entry to legitimate payment and banking institutions has been an ongoing issue within the industry, but dispensaries now have the ability to work with leading companies to advance the industry forward while demonstrating the industry’s commitment to operating compliantly and developing trust within the larger business community.
