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Bank fees are higher for cannabis merchants because costs are higher for banks regulated to handle money from cannabis merchants. The regulations they have to follow take lots of extra time for staff to complete.
Here are 4 reasons why the bank fees for cannabis merchants are higher than for regular merchant accounts
1. Bank deposit fees are higher. Some banks charge 5% for cannabis merchants to deposit cash. Why do you ask? Well, dispensaries receive a lot of cash. Many dispensary merchants make cash deposits every hour of every working day, so as not to accumulate cash in their physical location. They don’t want to tempt robbers by having a lot of cash on hand. But the banks must increase staff to handle all those extra deposits, count all the bills, and verify there is no counterfeiting.
2. Banks are required to file a money laundering report every day for every merchant bank account. You see the Feds look at a dispensary as money laundering, even though it is legal in the state where you are doing business. That is a lot of reports to fill out daily and again requires more staff than for non-cannabis merchant bank accounts.
3. Banks provide courier services to save you time and the risk of carrying lots of cash to the bank. These courier costs can add another 7% on top of the 5% deposit fees. Their fees cover costs to hire delivery drivers, truck maintenance, and gas for their vehicles. You could deliver your cash yourself to the bank, but don’t forget how valuable your time is and you still have gas and vehicle maintenance to cover. Plus, you are taking a risk of carrying a lot of cash around in your vehicle; a risk of losing the cash, and a risk to your health should someone try to take it from you.
4. Payment processing fees are also higher than for regular retail merchants because there is a higher risk of fraud in this industry. But the good news is that they are less than paying for cash deposits. Typically, payments deposited via a pin-debit terminal are around 4%. That is 1% less than what the bank charges to accept cash. And you save on the 7% courier fees, whether you pay someone or
do it yourself.
We can set you up with the only legal and compliant payment processing program for cannabis dispensaries. It is called True Pin Debit. At the request of Visa/MasterCard, it does not use the Visa Interlink or MasterCard Maestro pin debit rails but legitimately defaults to the other pin debit networks.
Check out our page about True Pin Debit: https://electronicmoneycompany.com/cannabis-industry-processing
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