**While there is still great information here with regards to payment options available to the industry, the payments landscape is an ever changing regulatory entanglement. For the most up do take options read our newest article here.
Payment options for cannabis dispensaries? Options? What options?
If you’re in the cannabis industry you are always looking for a way to take payments for your product and conduct business. For every step forward the industry takes, there are two steps backwards by the Federal Government. Like today when the news dropped that General Jeff Sessions will repeal the Cole Memo.
We will have to see how that goes, but for now we would like to talk about a payments option that will save you money, keep your business and your employees safer, and offer your customers more options for making their purchases. This option is called the PIN Debit Program. Not to be confused with the Cashless ATM! We will dive deeper into that in a moment. This option actually allows your customers to use their ATM cards, or debit cards, to pay for their products right at the cashier counter. Pin based debit transactions are processed over the debit network, creating an EFT(electronic funds transfer) type of transaction as opposed to going over the Visa, MasterCard and Discover network. Which we all know is illegal, right?
I’m sure you’ve probably read or heard from a lot of processors that they can help you accept credit cards.
If you are being told you can accept these cards, or IF you are accepting credit cards from the card issuing networks Visa, MasterCard and Discover then they are most likely miscoding your account to get it approved. For example, maybe you are operating a nursery or garden store and you are not really a dispensary. In this case you run the risk of being discovered and being shut down at any moment.
There are alot of articles out there, as well as processors, offering an option for dispensaries for taking payments with what is called a Cashless ATM and they will often say you can swipe a debit or credit card. We also offer a Cashless ATM for our customers and it is a good option to try to help dispensaries and marijuana delivery companies to take payments. But, they do not process credit cards. Technically, debit cards operate on a totally different and private network than credit cards do, meaning that the debit network will not recognize a credit card and therefore will decline the charge. So you cannot use credit cards with a cashless ATM.
Don’t confuse this with the cashless ATM. Many times you will here processors talk about pin debit and cashless ATM in the same breath but this type of option is actually an entirely different payment option. Cashless ATMs for the most part work the same way as an ATM except that there really is no cash dispersed. Oftentimes these units are free standing and the customer who is looking to make a purchase would swipe their ATM card and choose a “withdrawal” amount. This amount must be in increments of $5. The customer will usually bear the convenience fee (as much as $6!) for using the ATM but also be subject to an “out of network” fee for the transaction by their bank (anywhere from $1 to $3) for using the ATM, ultimately hitting them with fees on both ends that they must pay for the convenience. The machine then spits out a chit for the amount they have to spend at the store. At the time of purchase they would hand over this chit to the cashier who would then give them change for the difference between what they pulled out and what they actually spent. The more recent Cashless ATMs, like the ones we offer, are in the form of a terminal at the cashier. With this option the cashier would ring up the sale, add the service fee, swipe the card and then manually enter the sale amount, which they have rounded up to the nearest $5 increment, into the terminal and then make change for the customer to make up for the rounded amount.
While this is an option where there aren’t many for an industry that is being forced to operate in all cash, it isn’t necessarily the best option.
This is where the PIN Debit Program steps in and fills in the gaps.
One of the most impactful benefits of utilizing the PIN Debit Program in your cannabis dispensary or delivery business is the lack of cash handling. First of all having less cash in your store at any given moment has a multitude of plusses. Theft is a very real concern for everyone in the industry. Keeping very large safes to store the cash and hiring armored cars to transport that cash to the bank for deposit, and paying fees for those cash deposits, is not out of the ordinary for business owners. When more of your transactions are handled through electronic funds transfer you can breathe a little sigh of relief that you won’t have to transport and make as many of those huge cash deposits as you had to before. You will enjoy being funded directly into your account quickly. And the fees involved with processing PIN debit are low, saving you time and money. Of course you can eliminate your fees altogether by passing the small processing fees through to the customers and it will still cost less than if they were to use the cashless ATM.
For bud tenders, fewer cash transactions means less confusion and lower chance of mistakes while also allowing for quicker transactions. The same goes for delivery drivers. The fewer cash transactions they have to make the less chance of mistakes in making change, threat of theft lowers since there won’t be that much cash in the vehicle at any given time. And if you’re wondering how drivers would accomplish this on the road, we have portable terminals the driver will carry with them so they are able to swipe cards while out in the field.
Your customers will benefit from having access to the program too. Customers will appreciate lower fees with each transaction. Since customers have to pay a fee to use a cashless ATM and then be hit by their bank with a second fee when they process the transaction so they get double charged, they will definitely appreciate being able to use their debit card just like they would in any store. They also do not have to try to figure out how much they will spend ahead of time like they do with a cashless ATM. This actually leaves more room for spur of the moment purchases which helps you make more sales. If a customer decides they want another item they hadn’t thought about before, they are not likely to go take another withdrawal from the ATM only to have to pay the fees on both ends a second time, but if they know they can just use their ATM debit card to pay for the purchase they can add that extra little thing onto their purchase without any hassles.
More than anything, it’s important to have options, for both you and your customers. Even if you already have a cashless ATM on property, having a stable and transparent PIN Debit Program will help save you money, keep your business safer and bring you one step closer to transparent banking. At Bankcard Brokers we are happy to help our business partners succeed with the most cutting edge, transparent, and legal payment options. Our ETA-Certified Payments Professionals are very well educated in the regulations of the payments world and only work through legal and transparent payment avenues. Give us a call today and let us help you take your cannabis business to the next level.