Cannabis and cash have a history together throughout the prohibition era. But with an increasing number of state-legal cannabis markets, business owners are looking for long-term, sustainable solutions that go beyond cash. With so many marijuana payment processing options out there, it can be hard to determine which one is right for your business. But it doesn’t have to be so complicated.
Know Your Options
The first step to making this decision is to know your options. Consumers will adopt a range of methods to pay for cannabis, so it’s up to you to determine which one is best. While the names may vary, the mechanisms are the same. Aside from cash, there are Electronic Funds Transfers (EFT), also known as direct account-to-account transfers.
Other options include debit or credit card payments, which can have some pretty dire consequences, reverse ATMs, pre-paid cards, and cryptocurrency.
What to Consider
There are five key elements to consider when picking your cannabis payment processor.
- Compliance: Will your cannabis payment partner understand the regulatory and legal requirements of the industry? Does the company have good relationships with financial institutions and banking regulators to keep your money and data safe?
- Features: Whether you’re already vertically integrated, or you’re looking to expand your business in the future, you don’t want to worry about changing payment processing. Choose a solution that works across e-commerce, CBD, plant-touching, retail, and B2B cannabis payments.
- Revenue opportunities: Be aware that changing your payment processing could boost revenue by 20% as customers stop using cash. That increase can go up even more as you reduce your cost of cash or offer promotions.
- Fees: Any charges should be clear upfront. You’ll typically find that the cannabis industry has higher fees because it’s considered a higher risk, but your cannabis payments partner should be transparent about what to expect.
- Transparency: How do your payment partners cope with the issues of the cannabis industry? How long have they been operating? Don’t be afraid to ask the hard questions – if you can’t get a straight answer, that could be a red flag.
Next Steps for Choosing a Cannabis Payment Solution
It can be worthwhile to see a side-by-side comparison of the various payment options, as well as more details on the elements that you should consider. If you’d like to get more information about the best cannabis payment processing and how to choose an ideal partner, please download our Strategic Guide to Choosing a Cannabis Merchant Account for Your Cannabis Business.