The legal, regulated cannabis industry is unique, and as an evolving business model, dispensaries, customers, regulators, and law enforcement are still finding their way. A 2019 Gallup poll found that 66 percent of Americans favored legal cannabis. People’s long-held attitudes are changing and this helps normalize the entire cannabis community. But, when it comes to cannabis sales, federal banking laws have not adapted to consumers’ new attitudes. Despite developing into multibillion-dollar cannabis operations across the country, cash rules as if banks and cannabis credit card processing companies did not exist. This can limit dispensary (and delivery) purchases because they may have limited cash on hand, or they choose not to use a dispensary’s ATM machine.
Without banking reform via the SAFE Banking Act or cannabis legalization at the federal level, the major credit card companies will limit credit card use for cannabis transactions in dispensaries or delivery services. Even with a cannabis merchant account, banks routinely restrict debit cards from retail cannabis sales. Some dispensaries may choose to create merchant accounts that do not appear to be dispensary card processing transactions. This is risky, however, as the bank can terminate the merchant account without notice, causing instant chaos for the dispensary’s management team. As we all know, scrambling is best for cooking eggs, not running a business. Fortunately, debit and credit card payment processing solutions exist for cannabis dispensaries, and we’re leading the industry with our BLAZEPAY cannabis payment processing platform.
Get to the Point
Point of Banking systems, otherwise known as a “cashless ATM,” allow customers to use their debit or credit cards by making pin-based withdrawals from their accounts. However, cash is not part of the process. Instead, a receipt or voucher is placed in the register drawer. A customer “withdraws” funds in $5.00 or $10.00 increments, so if a sale comes to $68.00 and the customer withdrawals $70.00, they receive $2.00 in cash from the budtender. From the customer’s perspective, the payment process feels like a normal shopping transaction. They swipe or insert their card into the small BLAZEPAY processing terminal provided by our partner, industry-leader Dejavoo. The process benefits the dispensary because the transaction seamlessly integrates with the BLAZE Retail cash drawer to track money as it leaves the drawer. This reduces the number of human errors and ensures the numbers are correct at the end of each shift. BLAZEPAY also provides tipping for budtenders, so Point of Banking transactions don’t negatively affect their income.
BLAZEPAY provides a real-world solution by accepting all major cards with no barriers for customers. If you have a cannabis merchant account we can quickly have BLAZEPAY up and running, typically within two business days. To avoid system delays, BLAZEPAY utilizes multiple processors to ensure consistent payment processing. On the recordkeeping side of things, all payments have a corresponding transaction ID linking each deposit to specific transactions ensuring compliance with the “Know Your Customer” and “Anti-Money Laundering” banking regulations.
How to Choose a Cannabis Payment Processor
BLAZE clients know we’re dedicated to transparency and collaboration because they’re the core of our business philosophy. When choosing a cannabis payment processing company, transparency is a critical variable and it’s important to know with whom you’re doing business. Here are a few warning flags to consider:
- Do they readily answer your questions and create a partnership environment?
- Is Point of Banking utilized or do they utilize disingenuous merchant codes to disguise customers’ credit card purchases?
- Is the company transparent about their fees?
- Are they a U.S. company, or are they a foreign, off-shore entity?
- Do they have a history of service outages, and will they openly share that information with you?
- Is their system scalable?
Selecting a qualified and reputable cannabis payment processing company is a strategic and operational decision. “BLAZEPAY is an incredibly important customer payment solution for dispensaries,” said BLAZE CEO, Chris Violas. “Dispensary customers want to use credit or debit cards just like they would at any other legitimate business. We can help dispensaries and delivery services improve their per-customer sales by accepting card-based payments. Until cannabis laws change at the federal level, a Point of Banking platform is an essential, legitimate, and reliable way to improve the customer experience. Ask us how, and we’ll show you the way.”
