It is a well-documented fact that cannabis businesses suffer from a scarcity of banking options. Most banks and credit unions, fearful of running afoul of federal laws and card brand rules, are turning away cannabis businesses that want to accept credit cards, and those looking for safe places to deposit cash.
Much of the discussion around banking cannabis businesses has focused on the most public of these businesses: marijuana dispensaries. But there are plenty of other businesses that support cannabis growers and dispensaries that also are being turned away by banks and credit unions, and are being left without electronic payment options to offer their customers. These include labs that test cannabis products to ensure potency and compliance with state laws, cannabis product distributors, even landlords and professional services providers (think attorneys, plumber, and electricians) that work with marijuana dispensaries and other cannabis businesses.
We recently blogged about the situation and alternative payment solutions for the cannabis business. (See post here.) This post will focus on one specific solution – electronic checks – which can support consumer-to-business as well as business-to-business payments.
Checks have been around for centuries, but recent innovations and legal changes have enabled banks and their partners to put a 21st Century spin on this tried and true payment method. An electronic check (or eCheck) is a check-in every way, except that it originates electronically rather than on paper. The transactions leverage an electronic check clearing structure to move payments between banks as though they had started out as paper checks, which means they clear faster, on the same day or next day basis.
eChecks do not require merchant accounts and cost much less to process than do automated clearing house (ACH) and card payments. And because eChecks are covered by federal check law, there are no risks of chargebacks, as is the case with credit cards. eChecks also are priced well below automated clearing house (ACH) and card transactions.
Paybotic provides eCheck solutions for marijuana dispensaries, testing labs, cannabis, and hemp growers and other businesses serving the burgeoning market for marijuana, hemp and other cannabis products. And we offer a quick and easy approval process. If you run a marijuana dispensary or provide ancillary services to dispensaries another marijuana business, contact us today to learn how we can help you offer customers a modern, electronic payment method.