Since medical and recreational cannabis sales are not legal at the federal level, the answer is a flat NO. However, dispensaries do have another solution to accept plastic. They can use a Cashless ATM and process pin debit cards. A cashless ATM looks and feels like a credit card terminal. In fact, it is a credit card terminal, which is programmed to function and pass money through the ATM networks instead of the Visa/MasterCard networks.
This Cashless ATM terminal works just like an ATM. Here is an example of how it works:
Say a customer wants to purchase $82 worth of product. The customer will swipe or chip their pin debit card through the terminal and enter an amount of $82, which is then rounded up to the nearest $5 increment to $85. An ATM fee of $2.50 is added to the transaction, which now totals $87.50. The dispensary will hand back $3 to the customer while the $85 is routed to the dispensary’s bank account. The customer pays the ATM fee of $2.50, just like at a regular ATM.
This solution allows customers to use their debit cards for convenience without carrying around lots of cash. The benefits to the dispensary of having a cashless ATM are:
- The merchant does not need to send the customer down the street to an ATM and hope they return.
- The merchant does not require an ATM which takes up real estate space in their establishment.
- Customers are not limited to only spending the cash in their pocket. Therefore merchants can sell more products.
- The merchant does not have the risk of having lots of cash inside their location.
- The merchant does not have to risk having their ATM and the money inside an ATM stolen.
A merchant who tries to trick their credit card processor by framing themselves as another type of business like a doctor’s office or a yoga studio is not doing themselves any favors. As soon as the processor discovers that cannabis is being sold, the merchant’s account will be shut down.
Opening a medical or recreational cannabis store requires the owner to pay attention to a more significant number of regulations than opening a regular retail store. Learning those regulations and requirements and following them may take more time focusing on these details during set up, take more time to set up systems, and cost extra money to implement, but will save the merchant exponentially more in headaches and hard costs down the road.
Click Cashless ATM – Electronic Money Company to learn more or contact us with questions.