As everyone in the cannabis industry is painfully aware, traditional merchant services refuse to do business with dispensary operators. This leaves front-line retail outlets and their customers doing transactions with cash as the most common payment option, placing everyone concerned, including the general public, at greater risk of criminal activity such as burglaries, strong-arm robberies and fraud.
There is, however, one payment processing option that greatly reduces those risks: your customer’s debit card and a cashless ATM. This method is not just convenient, but also at present the only legitimate non-cash way to transact cannabis sales. Cost to the business owner is negligible, and the customer pays only a small out-of-network fee. Processing your transactions this way greatly reduces the amount of cash on the premises, improving your locations’ safety and security – better for your customers and staff.
Other benefits of a “cashless ATM” includes:
- Nominal start-up costs
- Eliminating the risk associated with having a cash-filled ATM in your lobby
- Fees are equal to out-of-network ATM charges – a small expense for the convenience
- Easy to use card terminals take up very little counter space
- Creates electronic bank deposits rather than cash deposits
- Increases sales by keeping the customer at your counter, accommodating impulse purchases
A quick word about traditional ATMs: roughly half of the nation’s 420,000 (yes, really!) machines are bank owned – meaning the other half are owned by small companies which lease machines out. Many, if not most, ATMs run on Windows XP, which as of April 8 is no longer supported by Microsoft – meaning from here on out, no patches or security fixes are forthcoming. Once that first XP machine is hacked, none will be safe.
Getting back to plastic: what about those services that claim to offer Visa and/or Mastercard transactions? The answer is as simple as the deception: they are miscoding the transactions as something they are not, in hopes of avoiding detection by the processor.
While the ability to process credit cards are certainly convenient for the customer, it is definitely not so convenient for the business operator when that processor discovers that you’re selling cannabis – and it’s definitely “when,” not “if.” Those whose contracts are cancelled can spend months chasing funds held by a card network – and the same threat applies to users of Square.
Finally, those caught miscoding transactions or otherwise working outside the intent of a provider’s contract run the risk of their name appearing in the Terminated Merchants File. Being “TMF’ed” is essentially the same as being blacklisted, with one’s name, business name, even personal information such as Social Security card number being attached to this file. It is also very difficult and time-consuming to remove oneself from the TMF. Few who’ve ever had to go through this thought it was worth the business generated by playing loose with the rules.
So, while we all wait for that wonderful day when banks will provide accounts and loans, and customers can swipe a Visa or Mastercard at a dispensary terminal provided by a processor who welcomes their business, the debit card cashless ATM is the most secure, convenient and cost-effective way to transact legitimate cannabis purchases in your store.