Cannabis Payment Processing, Ever Evolving
In the ever-evolving world of cannabis payment processing, navigating solutions can feel like a maze. Federal restrictions remain a hurdle, and keeping up with the latest options can be challenging. One term that frequently pops up in conversations is the “cashless ATM.” But what exactly is it, and how has it impacted the cannabis industry?
Cashless ATM: A Bridge Between Cash and Cards
Imagine an ATM that doesn’t dispense cash. That’s the basic idea behind a cashless ATM, also known as a point-of-banking system. Here’s how it works for cannabis dispensaries:
- A customer selects their desired cannabis products.
- At checkout, they swipe or insert their debit card into the cashless ATM terminal.
- They enter their PIN and choose a withdrawal amount that covers the purchase total rounded up to the nearest increment (commonly $5).
- The transaction is authorized, and the dispensary receives the funds electronically.
- The customer receives a receipt and their cannabis products.
On the surface, it seems like a regular ATM withdrawal. However, the key difference is that no actual cash is dispensed. The cashless ATM acts as an intermediary, facilitating a withdrawal by debit card. The Cashless ATM has been in operation for about 15 years (at the time of this post) and originated as a service for the payday loan industry.
Benefits of Cashless ATMs for Cannabis Businesses
For many years now, cashless ATMs have provided a lifeline for cannabis dispensaries facing limitations on traditional credit card processing. Here’s how they helped the industry:
- Increased Security: Cash-heavy businesses face a higher risk of theft. Cashless ATMs eliminated the need for on-site cash storage, reducing security concerns and insurance costs.
- Improved Customer Experience: Customers could use their debit cards for cannabis purchases, offering a more convenient and familiar payment method.
- Boosted Sales: Studies show customers tend to spend more when using cards compared to cash, potentially leading to increased revenue for dispensaries.
- Enhanced Recordkeeping: Cashless ATM transactions provide a digital record of purchases, simplifying accounting and tax reporting for dispensaries.
- Lowering Costs: Since funds received from a cashless ATM transaction are deposited electronically, dispensaries save a lot of money on cash handling and transportation fees.
The Evolving Cannabis Payment Processing Landscape & the Cashless ATM
While cashless ATMs offer valuable benefits, they are still considered a legal grey area by many. Major card networks like Visa and MasterCard have expressed concerns about potential violations of network rules. Additionally, some financial institutions remain hesitant to support cashless ATM transactions for cannabis businesses due to federal restrictions.
The future of cashless ATMs within the cannabis industry still seems to shine bright. If the processor is working in transparency with a bank that is supportive of the industry and the proper reporting and compliance steps are taken then the Cashless ATM has precedence to continue serving the industry.
Beyond Cashless ATMs: Secure Solutions for Today's Cannabis Businesses
At Bankcard International Group (BIG), we understand the challenges and complexities of cannabis payment processing. We offer a variety of state-of-the-art solutions to help cannabis businesses thrive in this dynamic landscape. These solutions include:
- Cryptocurrency Integrations: Secure integrations for secure cryptocurrency transactions both online and in person. Featuring wallet authentication and verification, zero market volatility, and flexible options.
- ACH Processing: Reliable and compliant ACH (Automated Clearing House) payment processing allows for secure bank transfers from customer accounts to dispensaries.
- ATM Placement Programs: In additional to point of purchase debit transactions BIG also has flexible ATM Placement programs.
- Cannabis Business Loans: Fast funding up to $10,000,000 with options to fit your business needs. Term loans, Lines of Credit, Receivables Financing, Equipment Financing, or cash advances.
Staying Ahead of the Curve with BIG
The cannabis industry is constantly evolving, and BIG is committed to staying at the forefront of payment processing solutions. We work closely with our partners to ensure compliance with all federal and state regulations.
As regulations shift and new technologies emerge, we continuously refine our services to provide the most secure, convenient, and cost-effective options for your cannabis business.
Ready to Explore Secure Cannabis Payment Processing Solutions?
At BIG, we understand the unique challenges faced by cannabis businesses. We partner with you to find the payment processing solution that best fits your needs and ensures smooth operation.
Contact BIG today to schedule a consultation and learn more about our comprehensive suite of cannabis merchant services.
Some Common Questions About Cannabis Payment Processing:
No, unfortunately until there is federal guidance dispensaries cannot accept credit cards. It is strictly against card brand and acquiring bank regulations.
PIN Debit refers to a transaction that is run over any of the PIN Debit networks. PIN Debit for cannabis can only work with networks that have expressly provided their permission to transact for cannabis. With a Cashless ATM (A.K.A. Point of Banking) transactions are very similar but the transaction is carried out on the ATM networks. Rather than funding a transaction like a card payment it is a withdrawl from the customer's account.
Yes, cashless ATMs can be compliant. So long as the processor and networks have established compliance policies to allow for withdrawls in cannabis locations. The cashless ATM was invented over 18 years ago and has been used mostly in the cannabis and payday loan industries.
Yes, Bankcard International Group (BIG) has been working in the cannabis industry since 2007. We have earned the reputation as the Gold Standard in cannabis payment processing. Our superior knowledge, experience, and ethical client centric standards also earned us the 2024 Top Payments Company at the PBC conference for payments, banking, and compliance in the cannabis industry.
YES! Bankcard International Group (BIG) offers Crypto payment processing for both online cannabis payment processing and for in person transactions. Learn more on our page about Crypto Payment Processing - we make it easy!
YES! BIG offers cannabis friendly ACH Payment Processing for both B2B and B2C transactions. Contact Us to learn more!
Yes! BIG has flexible ATM placement programs for all business types including cannabis dispensaries. Contact Us to learn more...
Absolutely! We offer business the ability to get funded up to $10,000,000 quickly! To learn more visit our Business Loans page.
YES! Bankcard International Group supports cannabis related businesses with credit card payment processing services. To learn more visit our page on Ancillary Cannabis Businesses Payment Processing.
YES! BIG offers cannabis payment processing services to the industry. Whether you own a dispensary, delivery, or ancillary cannabis business BIG has a solution for you!
Absolutely, BIG has been a supporter of the CBD industry for decades with dependable and affordable CBD Merchant Accounts, LEARN MORE.
A merchant account is an account with an acquiring bank that enables a business to accept credit cards. A merchant account is basically a line of credit that is established based on a number of factors including credit, business model, and the amount of “credit” that is requested. Bankcard International Group provides the absolute best rates and service possible.
An acquiring bank is a financial institution that is a registered member of the card brand associations Visa, MasterCard, Discover, American Express, etc.. in order to fund credit card transactions for their merchants. Acquiring banks provide transaction funding so businesses can accept credit cards, debit cards, and other forms of non-cash payments.
Acquiring banks are appropriately named as they acquire (or accept) credit card transactions from card issuing banks that provide consumers with credit cards. An acquiring bank is responsible for underwriting a “merchant account” for any business that it allows to accept credit card payments. In doing so, acquiring banks assume the risk associated with the transactions they process and fund. In the event that a business is unable to refund a reversal, chargeback, or refund the acquiring bank is liable to provide those funds to the cardholder.
Applying for a merchant account is relatively simple but you do need to be prepared to provide documentation to show that you are a legitimate business with good intentions.
Since merchant accounts are a function of the banking system and are susceptible to fraud they are required to adhere to federal guidelines including the Patriot Act and KYCC (Know Your Customer’s Customer) oversight. You will be required to provide your business information, personal identification, and credit information so the bank can verify your ability to be approved for an account.
