Cannabis Payment Processing: The Most Popular Companies US Dispensaries Use

Options for payment processing in the cannabis industry are limited because plant-touching businesses cannot accept credit cards.

This is because, while dispensaries are state-based, payment processing is not. Major credit card companies work on a national level and must adhere to federal regulations. Because cannabis is still nationally prohibited, this creates major risk for payment processors. Cannabis dispensaries cannot accept credit card payments because companies like VISA and AMEX cannot assume the “high risk” of being in the cannabis industry. Passage of the SAFE Act would change this, but the bill continues to stall out and dispensaries cannot accept credit cards in the meantime.

This makes cash king in the cannabis industry, which creates a set of risks for cannabis dispensaries. Working as a cash-only business and accepting large cash payments increases the risk of discrepancies in your books and theft at the point of sale.

Cash-only businesses also have a harder time upselling customers since cash on hand is limited. Many dispensaries have ATMs on-site for customers to overcome this and increase cash payments, but it can involve fees and it breaks up the customer experience. The ability to accept card payments is key. Flowhub, a cannabis payment processing system, found that customers spend an average of 30% more at dispensaries with at least one non-cash payment method.

Without credit card processing, there are a few other options cannabis retailers have, including point of banking (also called cashless ATMs) as well as ACH transfers and debit payments, although debit cards can be subject to the same scrutiny as credit cards. This makes cash, point of banking, and ACH transfers the preferred methods of payment for dispensaries since accepting credit card payments can get a business shut down.

These options all require the support of a cannabis payment processor, and there are many to choose from.

The inability of cannabis businesses to accept credit cards is a hindrance. But that doesn’t mean dispensaries and other cannabis businesses are out of luck: there are many cannabis payment processing companies out there. When shopping around for the right cannabis payment solution system, there are several factors to keep in mind.

• Fees. Point of banking systems often charge fees, and these can vary by company and transaction size. A convenience fee is common, but you need to know: is the fee for the transaction applied to the customers or does it take a piece of your profits? If it comes out of your end of the transaction, does the company offer an annual rebate? Are there other hidden fees in your contract that affect your cannabis payments?
• Integration. Is the payment processing system able to be integrated with your point of sale system? Integration of your payment system with your POS makes the checkout process move faster and removes the responsibility of the budtender to key in cards, transaction totals, and other numbers. Non-integrated systems increase the possibility of errors at checkout, which can throw your books off balance.
• Security. What steps does the company take to protect your customer’s valuable financial information? Without credit card processing, cannabis payments can use private bank account information, putting customers at risk in the event of a hack. Cyber security must be a priority of payment processing systems to keep the trust of consumers.

• Compliance. In the green rush of cannabis, some companies cut corners to inflate profits — make sure your marijuana payment processing company isn’t one of them. Common red flags are any companies claiming to be entirely cashless or offering credit card processors.

The most popular dispensary payment processing solutions for US-based cannabis businesses (and a few for Canada too.)

1. Flowhub

Offers: point of banking, ACH, and debit card payments

Flowhub is a US-based cannabis technology company. Their cannabis payment solution launched in 2016 and since then the company has expanded into mobile device scanners and integrated retail platforms. Their payment processing system is widely used in legal markets throughout the US and is well-liked for its integrated point-of-sale system and user-friendly interface. Flowhub offers cashless ATM solutions, ACH payment options, and the ability to accept PIN debit card payments.

The systems at Flowhub are made to build on each other, with a point-of-sale system that integrates flawlessly with their payment processor. Its platform also offers loyalty programs for dispensary customers, an online ordering platform, data analytics tracking, and a built-in compliance tool, supporting over 1,000 dispensaries across the country.

2. Paybotic

Offers: ACH, debit card, and eCheck payments

Paybotic specializes in cannabis industry payments. The Florida-based company has operated within the industry since 2014 and offers specialized solutions for medical marijuana dispensaries, recreational retail locations, and e-commerce businesses.

For payment processing, Paybotic offers PIN debit payments as well as eCheck, and ACH payment options. They also have a gift card program for promotional and reusable gift cards. Additionally, Paybotic offers a different type of payment structure: a set-up fee and a monthly retainer cost.

3. CannaPay

Offers: Point of banking and debit card methods

CannaPay started out as a payment processor and technology provider for small businesses before transitioning into the cannabis industry. They offer point-of-banking and debit card payment services, as well as a few creative services: a branded, reloadable gift card for your customers to use. CannaPay can help you establish banking services and they even offer armored car cash pickup.

4. Treez

Offers: ACH and debit card payment methods

Treez first entered the cannabis industry in 2016 as a point-of-sale software for retail locations. TreezPay, their payment processor, launched in 2018 and it facilitates PIN debit cards and ACH transactions.

Treez is one of the more popular payment processing systems, supporting over 5,000 retail locations across 12 states. Their seamless integration with their point-of-sale system creates a smooth customer and employee experience. Using both systems also makes it easy to manage online orders, delivery, and inventory.

5. Dutchie

Offers: ACH payments

Launched in 2017, Dutchie is a cannabis technology company that offers point-of-sale, e-commerce, and payment systems. DutchiePay allows your dispensary to accept ACH transfers.

Dutchie is popular in both the US and Canada because of its robust technology offers: the platform can help you manage everything from email marketing and customer service to payment processing, inventory management, and compliance.

6. Cova

Offers: ACH, debit card, and gift card payments

Cova is a cannabis retail platform offering a “retail tech ecosystem” that includes point-of-sale systems, inventory management, analytical tracking, and payment processing. With Cova, your company can accept debit card transactions, ACH transfers, and offer a gift card program.

Cova is a newer player in cannabis but they’re a rising star, winning awards in excellence, innovation, and user experience at award shows across the US and Canada. The company calls itself the most reliable retail platform on the market and supports 2,000 dispensaries across North America.

7. Green Check Direct

Offers: ACH, debit card payments, and wire transfers

Formerly called PayQwik, the company was acquired by Green Check Verified and renamed Green Check Direct by PayQwick. They offer ACH transfers, debit card payments, and wire transfers for cannabis payments.

Green Check is a fintech firm that offers technology solutions for the cannabis and CBD industry, including cannabis banking solutions, setting up a bank account for your business, business loans, HR, analytics tracking, and sales management tools.

8. Jane Technologies

Offers: debit cards, ACH, and JanePay methods

Jane Technologies is a retail technology company with two sides: business solutions technology and IHeartJane, a consumer-facing online cannabis marketplace. They offer the ability to accept debit card transactions or payments through JanePay, an ACH payment solution tailor-made for dispensaries. With JanePay, your business can offer exclusive cashback rewards for customers, something you won’t find at most other payment processors.

Jane Technologies also offers a point-of-sale platform to integrate with their payment processing, as well as e-commerce management, kiosk checkout, and data analytics for cannabis businesses.

9. Instabill

Offers: ACH transfers and cryptocurrency

This New Hampshire-based company is not an industry-specific cannabis payment processor but rather specializes in offering merchant services for high-risk businesses. Instabill has been working in other high-risk industries since 2001 and has decades of experience in payment processing.

For cannabis payments, their software allows you to accept ACH transfers. They also offer a cryptocurrency payment solution and accept payments from an offshore merchant account.

10. Bankcard International Group

Offers: debit card, ACH, Check, and Bitcoin payment options

BIG, for short, is a payment processor for high-risk industries like cannabis. Since 2021, they’ve offered the ability to accept PIN debit cards, ACH transfers, eChecks, and BitCoin for cannabis payments.

BIG has extensive education on payment options for cannabis companies, including a comprehensive guide to cannabis payment processing. BIG is accredited by the BBB and offers Tokenization & encryption of your data.

While the ability to take payments is limited in the cannabis industry and credit card payments are not allowed, your options for a payment processing partner are not limited. It takes time and effort to find the right system and business, but you’re rewarded with larger customer transactions, less cash on hand, and more protection for your business.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or learning more about your cannabis insurance options.

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