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Are you in the Cannabis Dispensary Business or are you thinking of getting into this gold rush of a business opportunity? If so, I want to talk to you about payments and I’m going to explain to you about the only true legal and compliant payment acceptance method for your industry.
Let’s do a little bit of background. First of all, credit cards are not legal for this industry. You cannot take Visa, MasterCard, Discover or American Express payments. The cannabis industry might be legal in your state, but it is not legal federally.
What did cannabis merchants do when this dispensary business got started? First, it was all cash! This was very problematic because the robbers knew there was a ton of cash in these businesses and they came in and robbed merchants blind. They tried installing ATM machines and robbers came in and tried to pull out the ATM machines to get at the cash.
Then what did people in industry do? They thought they would fudge a little on the credit cards. They wanted to take credit cards and asked, “Why can’t we take credit cards? Everybody else takes credit cards.” It’s not legal but they fudged. They would tell the credit card processing salesman that they were a yoga studio, but they were really taking cannabis payments. But what happened to those credit card processing companies when they find out the true nature of their business. They shut those merchants down put them on what’s called a “Hawk Alert” and now they can never take credit card payments again!
The next transition is the cashless ATM machine which a lot of you are maybe familiar with. It looks like a credit card terminal but instead of going through the credit card networks, it is going through the ATM networks. This is not legit either because Visa uses Interlink and Mastercard uses Maestro for their rails for pin debit and for ATM transactions. They are discovering that you dispensary guys are running cashless ATM payments on their networks and so they’re trying to shut it down.
We work with banks regulated for Cannabis that are advising their customers to not set up a cashless ATM machine. What’s the answer? the answer is now something called True Pin Debit and this True Pin Debit that does not use Interlink or Maestro. We use a credit card terminal that is set up for pin debit. The customer pays for the exact amount of their purchase. If their card is set up to use Interlink, it declines and then jumps right away to the next pin debit network that card issuer has set up for their customers. All banks and credit unions have more than one pin debit network that their customers can use with their card. This does not bother Visa or Mastercard at all. Cannabis payments are allowed on the other pin debit networks.
The benefits of True Pin Debit are:
- You don’t have to take a ton of cash and worry about people robbing your store.
- You have a way to take digital payments and the descriptor on the receipt is truly the name of your business “ABC Cannabis Dispensary”
- Sales increase because customers can spend more than the cash they have in their pocket.
- When we set you up for pin debit, we actually set you up so that you will be able to take credit cards as well when it does get legalized federally. You’ll be all set up and when that bill finally passes for the entire country. You’ll be all ready to go and it with a flip of a switch, you’ll be accepting credit cards.
The cannabis industry is highly regulated and we have a whole network of attorneys and accountants and bankers that can help answer any questions you have, so feel free to call us 505-362-0837.
I’m putting together a whole playlist in our YouTube channel for this industry so check out some other videos we have coming up to help answer your questions.
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