The legal cannabis market is rapidly evolving every day. It seems like just yesterday states began legalizing the use of medical and recreational marijuana, but the journey has not been overnight. Starting in 1996 California became the first state to legalize cannabis for medical use, and it was not until 2012 when Colorado became the first state to legalize recreational use.
While laws are changing rapidly, and federal legalization seems to be moving closer to becoming a reality, the cannabis industry still faces regulatory challenges with the banking system. Because it is still federally illegal, many financial institutions will not work with marijuana dispensaries despite them being legitimate businesses in their state.
Cashless Payments: The Gamechanger
Even though this regulatory hurdle has been a pain for many dispensaries, the introduction of cashless payment has been a game-changer in offering customers more cashless options to pay. This is great both for the consumer and retail establishments because it limits the use of physical cash which can be more difficult to account for. Having a primary cash business also presents security concerns for the industry, in that it raises the threat of robbery.
Luckily, the current payment landscape is changing. In this article, we will discuss the future of cannabis payment processing by providing you an overview of the various options available for payment. We will also take a look at the future of cryptocurrency payment to see if it will be a viable option going forward.
When considering the various options for cannabis payment processing, it is critical to note that shopping habits have changed considerably since the beginning of the pandemic. Consumer shopping behavior has largely switched from in-person purchases to online shopping as a way to minimize the risk of contracting the virus. This trend of people moving from in-person shopping to e-commerce has shaken up the retail landscape and has only further solidified online shopping as a far more convenient and stress-free way of making purchases.
This has left many retailers to have to adapt to new technologies that enable buyers to make purchases seamlessly through their online platforms. No one has felt the demand for convenient digital payments more than the cannabis industry.
Having experienced a huge demand spike for cannabis during the pandemic, a primary cash business was thrown into a new online consumer environment that demanded fast and convenient online ordering. This proved to be challenging at first for many dispensaries, who operated cash and in-person models of business. However, most dispensaries were able to pivot quickly offering many new e-commerce payment solutions to conduct business with.
Non-Traditional Payment Processors Swooped In At the Right Time
Of these cannabis processing methods, credit card processing companies often refuse to work with the cannabis industry due to their low-risk tolerance. This gave other non-traditional payment processors the chance to step in and fill the void of the credit card companies. Instant purchases using digital wallets, with apps like PayPal, Venmo, and Cash App, have allowed for digital payments to be processed online eliminating the need for a traditional cash transaction.
This development is an important step for the cannabis industry’s quest for further legitimacy and integration within the traditional retail business landscape. Making this transition to an e-commerce centric model is not simple and requires a lot of due diligence on the part of the cannabis industry. This due diligence needs to be applied to how businesses vet potential payment providers.
The Need for Innovative Cannabis Payments Solutions
When looking into e-commerce payment solutions, a cannabis company must choose a provider that is not just one-trick pony and can provide a variety of different services other than cannabis payment processing. Companies that offer “workaround” solutions should be avoided as those types of providers often get shut down. To ensure that you are not constantly changing your provider, you are going to want a compliant and sustainable e-payment solution that is going to have staying power. We recommend you look for providers that are constantly innovating and provide your customers with the same experience they are used to in mainstream retail shopping.
Businesses that have not previously used online payment technologies will have to undergo significant changes, but that should be something to look forward to. With the world changing every day, it is important to stay on top of current payment trends to ensure greater success over time. While this shift might be difficult to tackle at first, innovation in providing a seamless online shopping experience will remain critical if you want to stay competitive in the current retail environment. Luckily, once these systems have been implemented, you will find that they are very user-friendly and this will make the transition to digital payment much smoother than you would expect.
Will Cryptocurrency Payments be Ideal in the Future?
This question is somewhat difficult to answer at the present moment. While the innovation of cryptocurrency is an exciting development in how transactions could take place going forward, it is important to note that regulation behind this method of payment is still lacking.
Due to the lack of regulatory oversight, it might be too early to tell if crypto will be a viable payment alternative for cannabis going forward. Due to the uncertainty regarding federal legalization, in addition to the already present challenges the cannabis industry is faced with today, it is our view that cryptocurrency payment will not be ideal at this present moment.
By adopting crypto as a use of payment right now, you might open yourself up to unnecessary risk, and could overcomplicate your businesses by making the accounting of your transactions more difficult. The fluctuations of crypto pricing can also be a challenge to having secure stable payments.
While many believe that crypto is a viable and secure payment alternative, it is our view that it is still early to decide whether or not this is true. At this point, it seems like going with more traditional payment processing providers might be your best option in integrating an online digital payments system.
Paybotic Payment Processing Solutions
Are you looking for fast and reliable payment solutions for your dispensary? With years of experience in the cannabis payment processing space, Paybotic can assist you with all your cannabis business needs. Having established a strong network of domestic partners, we are able to provide solutions for every type of high-risk business.
Whether you are looking for debit card processing, ACH/eCheck, or other payment solutions, our team of experts will customize your experience while finding the best partners that can fulfill all your payment processing needs. To learn more, fill out a contact form call us at 844.420.4729 and speak directly with our team of professionals that will be glad to help you find the right payment solutions for your cannabis dispensary.