Marijuana companies face many challenges for payment processing due to various reasons. It’s difficult for cannabis firms to find a reliable and secure financial system for conducting transactions.
Although some financial institutions agree to provide financial services to marijuana companies, the number of financial institutions and banks is very less. Only a few financial firms are offering marijuana credit card processing solutions.
In this article, you will know the current challenges and how marijuana companies are providing innovative payment solutions to attract customers. You will also know about the risks involved in different types of payment methods and how you can overcome them with alternative payment processing.
Payment Processing Issues in the Marijuana Industry
If you have a marijuana firm, you must have known the challenges that retailers face for processing payments. They are struggling to find proper payment systems that can offer them secure and reliable financial services.
Since CBD and THC are two marijuana products that are hard to differentiate for a starter, some banks don’t want to take the risk. Although there is no penalty for processing payments for CBD products as the FDA allows some CBD, it can be a problem if the products contain more than 0.3% THC.
Hence, banks and financial institutions don’t want to take the risk. Now, let’s understand the current payment policy in the marijuana industry, and we will look into the available alternatives later in this article.
The Present Policy
Since banks don’t want to be involved in high-risk industries like marijuana, companies have taken a pragmatic approach. Retailers are trading cannabis products with cash. But cash transactions involve high risk and a financial loss to the cannabis firms for the following reasons:
- Keeping accounts of cash is difficult.
- Storing a lot of cash involves a high risk of theft. So, your money is not secure if you keep them with you.
- It consumes a lot of time to visit banks and deposit them in the banks. Additionally, some banks also don’t accept more cash deposits and ask for proof of legitimate earning. If you fail to provide enough evidence, you cannot pay it in conventional banks.
- Since customers are unable to pay through their cards, they are turning away from cannabis retailers.
With the above problems, conducting marijuana business with a cash-only method is not secure and reliable. However, these are some of the innovative payment solutions that marijuana companies are using to attract their customers.
Innovative Payment Solutions by Marijuana Companies
Well, things are getting better due to some financial firms taking major steps to provide financial services to cannabis companies. Although the features are less for marijuana firms in comparison to other industries, customers and retailers can rely on the payment solutions in terms of security.
Currently, there are mainly two kinds of payment solutions available for marijuana companies.
One is the cashless ATM payment system that allows customers to pay their bills through a card. They don’t need to carry cash to the cannabis stores for purchasing any CBD or marijuana products.
This payment system prevents merchants from banking regulations. It’s also a quick and effective payment method that provides better security than cash transactions. It’s also not a problem for those who have ever used a debit card or credit card for payments.
Contactless Payment Solutions
Another possible alternative for cash-based transactions in the marijuana industry is a contactless payment solution. This method allows the user to pay through an online portal. The process is secure and also convenient for the customers. Since merchants provide online payment systems and home delivery facilities, it’s convenient, and most people prefer this method.
Future Payment Solutions for Marijuana Industry
Although things are changing, it’s still a mile away till banks and financial institutions will provide the same level of services as they provide other industries. However, if the government and banks take the above solutions into their hand, things can change sooner than expected.