Just a few years ago, almost every customer-facing cannabis product for sale had a hard "cash only" price tag. Luckily for consumers and producers alike, new laws and new innovations are making it possible to purchase cannabis in much the same way that you can purchase anything else — with new, dynamic payment methods that don't require trips to an ATM. If you own a dispensary, a greenhouse, or any other cannabis business, you should know about the payment processing options that make it easier for you to do business.
An automated clearing house, or ACH, serves as a hugely useful middleman for a cannabis business. Not a bank per se, an ACH essentially functions as a go-between for banks themselves. 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. While some banks are nervous about dealing with cannabis businesses, there's no murky waters when it comes to an ACH, and banks are happy to take their payments in exchange for capital.
While an ACH provides a convenient pipeline for cashless payments, choosing the right one is the hard part for a dispensary owner. Like everything else in business, trust is key, and that's why it's useful to get third-party payment verification systems to make certain that every penny you send to an ACH turns into a penny you receive in your business account.
The problem with ACH is that you need to get the customer to buy into it (since it is their money, after all) which is why third-party solutions have bridged the gap for cannabis companies. Hypur Pay and Can Pay are two ACH apps that allow users to quickly check in at a store and check out once they have the products they want. This makes it easier and faster for both customers and owners, much in the same way these same customers can use Google Pay or other digital wallets to settle accounts.
The very name might sound odd, but a cashless ATM makes it possible for a customer to use a debit card or bank card to purchase cannabis in a dispensary. They simply function like an automated cash register: insert your card, input the amount you wish to spend, and the money is routed to the ATM as payment — no cash needed, no cash used. An owner can choose to put an ATM at the point of sale (like a cash register) or keep them on the floor so that guests can select their favorites as rapidly as possible. For the most part, this feels like a simple card scanner at a grocery store: slide, input PIN, and done.
These ATMs have benefits, but also drawbacks. One major drawback is that some cashless ATMs require payments in multiples of $5. This means that a customer who owes $15.01 is going to have to be charged a full $20 for their purchase, which some may find irritating and others may find too much to stomach. The risk of error only increases, furthermore, because a cashier may need to input all numbers, instead of having them automatically routed to the ATM. This slows down the process and can frustrate customers.
As cryptocurrencies like Bitcoin and Ethereum have exploded in both value and popularity, it's become clear that they are here to stay. The cannabis business that makes it possible for crypto payment is the business that has a clear advantage over its rivals. However, there's not yet a ready-made solution for any business, let alone cannabis businesses, for these types of payments.
Apps like Coinbase make it possible to buy and sell using these digital currencies, but there's absolutely zero security: whether you are buying or selling, beware of fraud. It's a smart idea to keep your eye on crypto innovations, but relying on them as a primary means of payments remains, for now, to be a risky endeavor.
For many cannabis businesses, cash remains king, and their business will continue to do most or even all of its exchanges using dollar bills. However, new technologies and innovations make it possible to connect buyers and sellers together using credit and debit cards, as well as digital payments. If you are thinking of starting or expanding your cannabis business, the experts at Canna Business Financing can help you gain access to the funding you require. Contact our team today.
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