Over the past several years we have seen changes to laws in various states throughout the country regarding their stance on marijuana. Many states have realized there are certain properties of the drug which are beneficial for certain types of medical conditions. Other states have discovered untapped tax revenues they could collect from legalizing marijuana for recreational use.
The reasons for this is that merchant providers and banks were still trying to determine the risks of providing such a solution, along with figuring out how the laws in the states would affect how payments were processed electronically through a credit card machine or as an ACH payment.
Some retailers were faced with using offshore processing, which resulted in exorbitant fees and charges, along with even greater risks of chargebacks and fraud. Today, things are starting to change, and it is possible to find marijuana merchant account providers willing to help licensed and authorized dispensaries obtain their own merchant account.
With these changes, there have been new processes and procedures on where and how people can legally buy marijuana, like at authorized dispensaries that are licensed by the state, and only sell to customers who meet the state’s purchasing requirements. For instance, in Florida, you need a medical marijuana card and can only purchase marijuana for medical reasons.
On the other hand, in Colorado, anyone over the age of 21 can purchase marijuana for both medical and recreational use. Along with these changes are how the dispensaries process transactions and collect payments. They are essentially a retail business, just like any other retail operation, except they are regulated by their state’s government to ensure they are complying with current laws.
In the past, marijuana dispensaries were cash-only-based businesses. This is because there were not any debit and credit card processing solutions offered by marijuana merchant account providers. Even banks would return paper-based check payments.
The reasons for this is that merchant providers and banks were still trying to determine the risks of providing such a solution, along with figuring out how the laws in the states would affect how payments were processed electronically through a credit card machine or as an ACH payment.
Some retailers were faced with using offshore processing, which resulted in exorbitant fees and charges, along with even greater risks of chargebacks and fraud. Today, things are starting to change, and it is possible to find marijuana merchant account providers willing to help licensed and authorized dispensaries obtain their own merchant account.
While these changes are great news to marijuana dispensaries, they are still considered high-risk business ventures, so their marijuana merchant accounts are also considered high risk. One reason for this has to do with the regulations and laws regarding the sale of marijuana. Since there are greater risks, due to some retailers who might attempt to disregard or overlook certain laws when it comes to sales, it could result in legal actions being taken against the dispensary owner.
As a result, many banks and merchant providers do not offer credit and debit card processing solutions. However, there are a few providers who will work with you to determine the most appropriate high-risk merchant solution that best fits your needs. For instance, an alternative, when you want to offer a cashless option, would be to accept ACH payments (paper checks processed as e-check payments).
To find out what options and solutions are available in your state for accepting credit and debit cards and ACH payments at your marijuana dispensary, call Leap Payments at 800-993-6300 to speak with a representative today!
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