MJ Stack’s team of cannabis business advisors are industry experts who offer free services to ensure you have the cannatech stack you need so your business can thrive. 

In December 2021, Visa put out a warning that the use of “cashless ATMs” at dispensaries are prohibited given the federal ban on marijuana. The cashless ATM option emerged over the last few years as an immensely popular and convenient alternative to cash-only transactions at dispensaries across the country. Using a cashless ATM lets customers round their payment up if they don’t have enough cash to cover their transaction, and then they receive the balance back in cash. Anywhere from one-third to one-half of cannabis businesses across the US currently use cashless ATMs, but now Visa’s new rules show potential disciplinary action against these merchants that could include potential fines of $200,000 or $2,500/day. 

Saying the cannabis industry needs better payment options is like saying the sky is blue. Unfortunately we need federal legalization before more expansive payment options are possible. While cashless ATMs has been an incredibly attractive option to the cannabis industry, until federal legislation passes, the notice from Visa in late 2021 does mean using cashless ATMs could lead to fines. And if your cashless ATM gets shut down, you’ll want to have other payment options at the ready.

So what ARE your payment options?

Cash

We know, it’s less than ideal, and you’re ready for a better solution. With the cannabis industry projected to exceed $25 billion in sales as of the end of 2021, most of the dollars are being transported the old fashioned way – in paper currency. This presents obvious safety risks to your physical business as well as any drivers and vehicles transporting that currency. There are other downfalls to cash transactions as well. A customer’s purchase is limited to however much cash they have on hand, versus your business having the ability to upsell and earn more revenue. It complicates bookkeeping and is more prone to user error in counting and processing thousands of dollars each day. 

Cash is still the simplest and an obviously legal payment option for your cannabis business. But it comes with its risks, and there are safer payment options MJ Stack can advise on that can move you away from cash.

Have an ATM installed

An ATM on site lets customers access more cash quickly if they’re short on money for their transaction. However, Banks and ATM processors are shutting down terminals owned and funded by cannabis dispensary owners. You can install an ATM through a placement or partnership program, which would leave the cash loading in someone else’s hands but still give you a percentage of the income. Even though an ATM placement or partnership program is the most ideal and compliant program for cannabis dispensaries, dispensary owners need to be aware and only permit compliant ATM deployers to have ATMs in their stores. A compliant ATM deployer goes through stringent compliance checks with a bank to provide an ATM and cash loading. While the risks of having cash in-store are still present with an ATM, MJ Stack has vetted ATM partners who have worked in the cannabis industry if you are interested in this option.

PIN Debit

Unlike a cashless ATM, which rounds a transaction up and gives the customer their balance back in cash, taking PIN debit payments charges the customer the exact amount of their transaction. However, it does charge the customer a percentage of the total ticket price. Depending on your point of sale (POS) system, PIN Debit processing can be fully integrated into your POS to create a more seamless checkout experience.

ACH transfers

ACH stands for Automated Clearing House, and it refers to money being transferred between banks without checks or debit cards. These are fully electronic transfers, so your business can immediately verify the existence of funds and they would go directly from your customer’s bank account to yours. They are simpler than a cashless ATM, and very reliable. However, you do need to implement a third-party solution through a banking partner to be able to accept them. And the customer will have to register through that third-party system, download a mobile app, and then check in at your dispensary through that app. Once this is all integrated, check-out is simple and fast.

What steps can you take to streamline payments right now? 

Ultimately, the cannabis industry needs better and more payment solutions that are safe and convenient. We are hopeful that if Congress can pass the Secure and Fair Enforcement (SAFE) Banking Act, it would allow banks to serve legal cannabis companies and expand the cashless options for marijuana transactions. 

In the meantime, there are payment options like the ones listed here that can move you away from cash. And it’s possible to integrate these solutions into your POS system to create a seamless transaction experience. However, going the full integration route is usually more expensive. Using nonintegrated solutions is cheaper, but can lead to manual card entry errors. 

You can also get set up with a banking partner that can help you gain access to stable, affordable financial services. MJ Stack has vetted vendors that partner with financial institutions that have actively chosen to work with the cannabis industry, so you will be well-protected and well-understood. You’ll work directly with this banking partner with no middlemen, which will save you time and money. If you set up financial services with a trusted vendor who knows the industry, you’ll then be able to invest in a digital payment solution that lets your business operate more efficiently and create more sale opportunities. 

Setting up a free, 30 minute consulting call with us here at MJ Stack could be the start of saving yourself time, money, and headache in setting up payment options and financial services for your cannabis business that you know will be safe and compliant.  You’ll be able to eliminate the burden of managing overwhelming amounts of cash, reduce risk of theft and fraud, and be able to focus on increasing sales – all while giving you peace of mind that you are in compliance with the law. If you are currently using a cashless ATM, we can advise on how you can implement other non-cash payment solutions in case your cashless ATM gets turned off. We can also ensure you’re working with flexible solution offerings that offer short term and month to month agreements so that you are not locked into a relationship. We’ll provide a complete assessment so you can have the financial cannatech you need to grow your business seamlessly and safely. And all of MJ Stack’s consulting is always 100% free to you.