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PIN debit versus A.c.h. And cashless ATM. How do you know which payment solution is best for your cannabis dispensary?
Hi, I’m Gingergaye, President of Electronic Monday Company. I’m going to start by talking about PIN debit a little bit. You have a credit card terminal which does only PIN debit, and the customer dips their card and enters their PIN. The money goes directly to your bank. At the end of the day, in the bank, it is considered cash. It cannot be charged back, it cannot be contested and it is the exact amount of the purchase. Now I’m going to talk about some of the other solutions and come back to a few more details about true PIN debit at the end and talk a little bit about the fees and our zero cost program with true PIN debit.
So another solution is A.c.h. And A.c.h. Is a bank to bank transfer of the checking accounts? It works like this. The customer downloads an app in their phone and then they enter their bank credentials into that app. And then they enter the amount and it’s transferred to the merchant’s bank account. Now customers are a little bit leery of this because there’s a reluctance, because they’re giving out their bank information into an app that the merchant has access to, even though it’s protected, it’s still developed some reluctance with customers. It also is a little bit time consuming. They have to go in and do some stuff in their phone in order to pay. It’s certainly not as simple as dip and enter my pin and I’m done. A.c.h. There’s reluctance. See for also with merchants because when the amount is entered, the transaction is completed by the customer. The funds are check to make sure there are enough funds to handle the purchase.
However, the transaction takes a couple of days and by the time it’s ready for the transfer to the merchant’s bank account, there may not be enough funds. So online ordering for cannabis is used a lot by dispensaries who want to make it easy for people to order and then come in and pick it up and they customers want to pick it up the same day. So to make the process easy for customers, they have this online ordering page by a.c.h. And then guess what? The the customer comes in, picks it up, the product’s gone. And there are times then when there aren’t enough funds to cover it and the merchant is just out the money. So A.c.h is adapted. It’s used, but it’s not 100% really good solution for customers or merchants.
There are also wallets solutions that are similar to processing. For example, there’s an app out there where a customer can use their credit card to purchase money to put into a Venmo account for the merchant. And then the merchant can access the money and complete the purchase. However, this program again has some reluctance with customers using their credit card to transfer cash. And it’s cumbersome time wise. But also there’s a 7% charge to the merchant for using this program and that is highly expensive. So another solution you’re probably familiar with is cashless ATM. It began as a workaround to the credit cards. It takes a debit card. You put it into the terminal and it rounds up to the next $5. And now the Bud tender has to give cash back for that rounding to the customer. It also adds an ATM transaction fee, usually about $3 on top of the transaction for the customer to pay. Sometimes the cashless ATM processors also add fees on the back end to the merchant. The solution a lot of times is used by somebody is Visa or MasterCard.
Debit card and Visa and MasterCard do not want any cannabis purchases running on their network because it is not federally legal. And so they’ve caught on to this workaround that’s been used for the past three or four years, I’ll say. And they are now able to search for and find transactions that are rounded up to $5. If somebody some merchants transactions are 85, 75, 80, 95, 65, they know they’re using a cashless ATM. So they are now sending messages to those merchants, shut it down or we’re going to find you. We’re going to shut you down. So this process is also cumbersome for the bud tender and it’s losing its allure, I’ll say. So along comes a true PIN debit solution. So we touched on this at the beginning. The true PIN debit solution is exact. The amount I just purchased $72.87 worth of product, and that’s what I enter with my PIN debit card. It goes to the merchant’s bank account by the next morning and it can’t be contested like a credit card. It also does not go through the Visa or MasterCard networks. It is programed when somebody uses their Visa card and dips it in its program to recognize Interlink Network on the back or the MasterCard Network on the back. And it declines the transaction in immediately goes to the next debit network that is authorized on that debit card. So it is truly legal and compliant. Now the fees for true PIN debit run approximately 3.8%.
We at Electronic Money Company are offering the fees at about a half a percent savings at about 3.3%. We also have a zero cost program which allows you to add the fees back on to the consumer at the terminal and it results in zero cost for the merchant.
Hope you enjoyed this video. Reach out to us by phone at 5052962847 or through our Contact US page. I am offering a FREE Terminal for anybody who sees this video and contacts us right away. So call today!
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