The currently murky legal status of medical and recreational marijuana dispensaries has led Visa, MasterCard, Discover, and American Express to classify dispensaries as illegal businesses, leaving merchants without access to credit card processing for medical marijuana. Until this matter is resolved at the federal level, it appears that the major credit card processors will not provide merchant services for marijuana dispensaries. This policy has forced most marijuana vendors to exclusively accept cash transactions, limiting payment options for dispensaries and turning their customers and their cash-only locations into targets for robbery.
We have listed the top providers of marijuana merchant accounts below. Given the firm stance of the major banks, it is reasonable to assume that all of these providers offer point of banking systems as their primary method of card acceptance for marijuana vendors. However, the providers themselves will have more up-to-date information on the marijuana merchant services they provide.
Some marijuana merchant account providers have found workarounds that do not rely on major credit card processors. Marijuana credit card processing is typically made possible by a service called a point of banking system. This system, also known as a “cashless ATM,” functions in the store as a PIN-based swiped transaction, but the actual processing of the payment is completely different from traditional credit card processing.
When a customer swipes a credit, debit, or ATM card through a point of banking terminal, the terminal essentially acts as an ATM that the customer might find at his or her bank. The only difference is that no physical cash is ever withdrawn from the customer’s account. Instead, the customer must enter a PIN, choose a type of transaction (in this case a withdrawal), and specify the dollar amount being withdrawn. Just as with ATMs, these dollar amounts are in increments of five dollars ($10, $15, $25, etc.). The terminal then prints a receipt for the customer to sign, and the merchant places a copy of that receipt in the register before providing the customer with change to make up the difference. For example, a cashier in a dispensary would hand back $3.20 in cash for a $16.80 purchase made by a customer who selected a $20 withdrawal. This greatly reduces the amount of cash on site, and the swiped payment is deposited in the merchant’s bank account usually within three days.
Generally speaking, marijuana merchant services providers encourage merchants to charge a convenience fee (usually about $0.99) on each transaction to cover the cost of the terminal/processing service. This fee comes at the customer’s expense, so merchants should weigh a customer’s potential irritation with a surcharge against the convenience of offering card payments.
Please note that CardPaymentOptions.com has not assessed the legality of the payment methods offered by the following providers. This list is simply a resource for medical and recreational marijuana vendors who are seeking credit card processors that claim to process sales for the marijuana industry. Merchants are strongly encouraged to research the services offered by these providers before agreeing to process card payments for marijuana through them.
Why These Providers
eMerchantBroker is a Los Angeles, California-based company that offers high risk e-commerce processing solutions including medical marijuana merchant accounts. The company’s products include credit card processing, ACH processing, an online payment gateway, merchant cash advance, and a chargeback management system to help merchants dispute and resolve chargeback claims. eMerchantBroker’s medical marijuana merchant account enables legally operating dispensaries to accept PIN debit payments and e-wallet payments on site. CBD and medical marijuana are established specialty areas for eMerchantBroker, although CBD payment processing is currently only available through an offshore bank.
eMerchantBroker offers custom pricing for each merchant and maintains a low complaint rate relative to its size and merchant portfolio. Our review of eMerchantBroker gives the company an “A” rating overall and the BBB assigns the company a rating of “A+.”
The Transaction Group
The Transaction Group (thetransactiongroup.net) is a Jacksonville Beach, FL-based ISO of PowerPay that claims to have “partners that offer legal marijuana merchant accounts for medical marijuana dispensaries in the United States.” Whether or not these partners are PowerPay and its processor is unclear at this time. The company’s website stipulates that medical marijuana vendors must be retail locations only (no eCommerce or MOTO transactions allowed) and does not mention point of banking systems. Whether this company offers traditional credit card processing for medical marijuana is currently unknown, so merchants are advised to fully inquire as to the legality of any services they receive. The Transaction Group is currently showing no rating with the Better Business Bureau (BBB) and does not have any complaints filed within the last three years.
If your business offers merchant accounts and payment solutions to medical marijuana dispensaries, please leave a comment in the comment section below or contact us through our contact page in order to get listed in this article.