A few years back, nearly every cannabis product sold to customers had a “cash only” price tag. Producers and consumers both have the benefit of new laws and innovations that make it possible to buy cannabis much like other products. You should be aware of the payment options available to you if you have a dispensary or greenhouse, as well as any other cannabis business.
Automated Clearing House
A cannabis business can use an automated clearinghouse (ACH) as a middleman. An ACH is not a bank, but it acts as a intermediary between banks and the ACH. These businesses will collect the payment from a debit or credit card (where such services are legal) and route them towards a bank for service. Although banks may be nervous about dealing cannabis businesses, banks will happily accept their payments in return for capital.
An ACH is a convenient way to make cashless payments. However, it can be difficult for dispensary owners to choose the right one. Trust is essential in any business. Third-party verification systems are useful for verifying that each penny sent to an ACH will be credited to your business account.
The problem with ACH is the need to convince customers to purchase it. Third-party solutions are able to bridge the gap for cannabis businesses. Hypur Pay or Can Pay allow customers to quickly check into a shop and then check out when they have purchased the products they desire. Customers and owners can both use this app to check in at stores and then checkout.
Although the name may sound strange, a cashless ATM allows customers to use their debit or bank cards to purchase cannabis at a dispensary. The ATMs work like an automated cash register. Simply insert your card and enter the amount you want to spend. No cash is required. The owner has the option to place an ATM at the point-of-sale (like a cash register), or leave them on the floor for guests to quickly select their favorite. This is a basic card scanner in a grocery shop: simply slide the card, enter your PIN and you’re done.
These ATMs offer many benefits but also drawbacks. Cashless ATMs can only accept payments up to $5. This is a major problem. A customer with a $15.01 outstanding balance will have to pay $20 to complete their purchase. This can be irritating for some and may cause stomach problems for others. Further, the risk of error increases because a cashier might need to enter all numbers instead of them being automatically routed to an ATM. This can slow down the process and frustrate customers.
It’s clear that cryptocurrencies such as Bitcoin and Ethereum are here to stay. It is the cannabis business that allows crypto payments that has an advantage over its competitors. There isn’t yet a solution that can be used to make these payments for cannabis businesses or any other business.
Coinbase, an app that allows you to sell and buy digital currencies, makes it easy to do so. However, there is no security. Beware of fraud, regardless of whether you are selling or buying. While it is smart to keep an eye on crypto innovations and to rely on them for primary payments, it remains risky.
Conclusion: Payments & Processing
Cash is still the king for many cannabis businesses. They will continue to use dollar bills for most, if not all, of their transactions. New technologies and innovations have made it possible to link buyers and sellers using digital and credit cards.