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High on Efficiency - Unveiling the Best Cannabis Credit Card Processors |
More and more states are legalizing marijuana for recreational and medical use, and as a result, dispensaries are springing up all over the country.
With the upcoming explosion of the cannabis industry, it is imperative that these merchants, who are also business owners, are aware of how to locate the most reliable marijuana payment processing services.
Perhaps you are among them.
Then you'll need to familiarize yourself with the ins and outs of credit card processing.
There are a number of businesses that provide merchant account services to cannabis dispensaries, in case you ever thought your company could only take cash. Knowing who to contact is all that's required.
Easy Pay Direct is a top choice for cannabis businesses in need of a reliable and secure payment processing solution. It stands out for its emphasis on robust security measures, which are crucial for high-risk industries like cannabis.
The platform offers seamless integration with various e-commerce platforms and point-of-sale systems, making it a versatile option for businesses looking to streamline their payment processes.
One of its notable strengths is its excellent customer support, which provides timely assistance and helps resolve issues effectively.
- Robust Security Features: Advanced fraud protection and security measures tailored for high-risk industries ensure safe transactions.
- Easy Integration: Compatible with a range of e-commerce platforms and POS systems, making setup straightforward.
- Excellent Customer Support: Responsive and knowledgeable support team that assists with any issues.
- Higher Fees for High-Risk Merchants: Due to its focus on high-risk industries, the fees can be higher compared to traditional processors.
- Lengthy Application Process: The approval and setup process may be more time-consuming than other processors.
Easy Pay Direct specializes in secure payment processing for high-risk industries, including cannabis.
Their platform is designed to handle the unique challenges of these sectors, such as minimizing chargebacks and preventing fraud, ensuring a smooth transaction experience.
eMerchantBroker (EMB) is renowned for its expertise in servicing high-risk industries, particularly the cannabis sector.
With a focus on providing tailored payment solutions, EMB stands out for its high approval rates and extensive experience in navigating the complexities of the cannabis market.
Their platform offers a variety of payment processing options, including credit card processing, ACH transfers, and more, catering to the specific needs of cannabis businesses.
While their flexible solutions are advantageous, it’s worth noting that EMB’s fee structure can be complex, and certain services may come with higher rates.
- High Approval Rates: EMB has a strong track record of approving merchant accounts for cannabis businesses, even those with challenging credit histories.
- Extensive Industry Experience: Years of experience in the high-risk sector allow EMB to offer specialized solutions.
- Flexible Payment Options: A variety of processing options are available to suit different business needs.
- Potentially Higher Rates: Some services may incur higher fees compared to other processors.
- Complex Fee Structure: The fee structure can be intricate, requiring careful review to understand all costs.
eMerchantBroker specializes in high-risk merchant accounts with a focus on the cannabis industry.
Their expertise in this area allows them to offer tailored solutions that address the unique challenges faced by cannabis businesses, such as regulatory compliance and high chargeback rates.
3. PaymentCloud
PaymentCloud is a versatile payment processing provider that caters to high-risk industries, including cannabis.
Known for its competitive pricing and smooth onboarding process, PaymentCloud offers a range of payment solutions designed to meet the needs of cannabis merchants.
The company provides dedicated customer support to assist with setup and ongoing management, ensuring that businesses can maintain efficient payment operations.
Despite its advantages, PaymentCloud’s limited international processing options and the potential requirement for a reserve account for high-risk merchants might be drawbacks for some businesses.
- Competitive Pricing: Offers affordable processing rates, which can be beneficial for cannabis businesses.
- Dedicated Support Team: Provides personalized assistance to help businesses navigate the payment processing landscape.
- Smooth Onboarding: The process to get started is streamlined, making it easier for new businesses to begin processing payments.
- Limited International Processing Options: May not support international transactions, which could be a limitation for businesses with global customers.
- Potential Reserve Account Requirement: High-risk merchants might need to maintain a reserve account, which could impact cash flow.
PaymentCloud specializes in payment processing for high-risk industries, including cannabis.
Their focus is on offering cost-effective solutions and excellent customer service, aiming to support businesses with the specific challenges of the cannabis sector, such as high chargeback rates and regulatory hurdles.
Many cannabis merchants assume it's illegal to process credit card payments for their products. However, this isn't entirely accurate.
In the United States, major banks and credit unions are governed by federal regulations. Since cannabis is federally illegal, this introduces higher risk levels for financial institutions.
In 2013, the Department of Justice issued the Cole Memo, which prevents prosecutors from targeting legal cannabis businesses that comply with state regulations.
Thus, a gray area exists.
As a cannabis dispensary merchant, you can process credit card payments for your products, provided you understand the correct procedure.
It all starts with establishing the appropriate merchant account services. You need two primary components:
- Merchant Accounts: Preferably multiple accounts where your sales revenue will be deposited.
- Payment Processing Company: This entity will handle payment acceptance, approval, and transfer of funds into your merchant accounts before depositing into your business bank account.
High-risk merchant account providers typically offer both services.
Research indicates a majority of people prefer paying with credit or debit cards over cash.
Only 19% of people prefer cash payments, meaning 81% use other forms of payment.
People appreciate the convenience of using cards and tend to patronize businesses that accommodate this preference.
You don't have to accept credit cards at your dispensary, but other methods can seem questionable and aren't recommended.
Instead of collaborating with a cannabis payment processing company, you could:
- Continue accepting cash payments only: This could lead to lost revenue.
- Misrepresent your products: For example, some New York "sticker" stores offer a free cannabis gift with sticker purchases.
- Offer cashless ATM services: This processes payments as debit transactions, often leading to quick shutdowns.
- Accept electronic checks and ACH transfers: This requires a special app, which can be difficult to get customers to download.
These alternatives can be problematic, so working with a company experienced in cannabis payment processing is advisable.
Apart from legal issues, several factors contribute to cannabis businesses being considered high-risk.
All businesses face chargebacks, but the risk is higher in the cannabis industry.
If a customer isn't satisfied with a product purchased for a specific ailment, they might not be able to return it and may file a chargeback with their credit card company.
Higher chargeback rates increase your risk level, possibly leading to loss of merchant account services.
Since cannabis is federally illegal, there are no specific MCCs for sales. Many merchants use MCCs for other products, but this can jeopardize their merchant accounts.
Some merchant account providers specialize in working with cannabis businesses and understand how to navigate these challenges.
Choosing the right marijuana credit card processor requires careful consideration. Here's what to look for:
Evaluate the reputation of a cannabis merchant account provider by asking:
- Have they ever abruptly terminated a merchant account? If so, why?
- Do they offer merchant accounts domestically or offshore?
- What are their online reviews like?
- Do they have a good rating with the BBB?
Gathering this information will help you make an informed decision.
Your marijuana credit card processor should be transparent about pricing and fees to avoid surprises later.
The average rate for cannabis processing is about 5.95% + $0.30 per transaction, though this can vary. Annual or monthly fees and a rolling reserve (typical for high-risk merchants) might also apply.
A rolling reserve means the provider holds back a percentage of sales for six months to cover chargeback fees.
Choose a payment processor with reliable software. Frequent downtime is inconvenient for you and your customers and could cost you business.
Ask about the provider's average uptime, and be wary if they refuse to disclose this information.
The cannabis industry is projected to reach $43 billion by 2025. Your payment processor should be able to scale with your business as it grows.
Ensure they understand the industry’s projected growth and can support your expansion.
Ready to research and contact marijuana payment processing companies? Here are some additional tips:
Excitement about opening your business or accepting credit card payments can cause you to overlook contract details. Avoid long-term contracts (3-5 years) if possible.
Choose a provider offering month-to-month agreements to avoid high termination fees. If you need a POS system or terminal from the provider, read that separate contract carefully.
Having multiple merchant accounts mitigates the risk of losing substantial money due to processing issues.
If one account faces issues (like a high number of chargebacks), having additional accounts can minimize financial disruptions.
Ensure your processor offers reliable customer service and tech support, preferably around the clock, to resolve issues promptly and avoid business interruptions.
Leasing POS systems or credit card terminals is costly. Purchase equipment outright if possible, or use virtual terminals or payment gateways to save on fees.
Ensure your chosen provider can integrate their software with your existing equipment to reduce costs.
Navigating the complexities of credit card payment processing in the cannabis industry can be challenging, but it is achievable with the right knowledge and partners.
By understanding the legal landscape, recognizing the benefits of accepting credit cards, and choosing a reliable payment processing company, cannabis merchants can enhance their business operations and meet customer preferences effectively.
Thorough research and careful selection of a payment processor will not only ensure compliance with regulations but also foster business growth and customer satisfaction.
- Easy Pay Direct: Easy Pay Direct is known for providing robust payment solutions tailored for high-risk industries, including cannabis. They have a strong reputation for transparency in pricing and comprehensive support for merchants.
- eMerchantBroker: eMerchantBroker specializes in high-risk merchant accounts and is experienced in working with cannabis businesses. Known for their excellent customer service and industry-specific expertise, they are a trusted partner for cannabis merchants.
- PaymentCloud: PaymentCloud offers customized payment processing solutions for high-risk industries, including cannabis. They are praised for their transparent pricing, reliable service, and ability to scale with growing businesses.