A major point of tension for cannabis retailers is the point-of-sale transaction. Due to the illegal status at the federal level of many products sold in stores, cash prevailed.
But money is not the most practical thing in the 21stavant-garde commercial landscape of the century. Dispensaries have used a wide range of workarounds and legitimate solutions to this problem over the years, but banking nonetheless remains obscure territory for retailers interested in streamlining the consumer experience.
Paybotic was founded in 2012 when Max Miller, president, was a student at Boston College. In November of that year, voters in Colorado and Washington passed measures to legalize adult use – the first in the country – and sales would begin in early 2014. Since then, 16 more states have passed legislation. some form of taxed and regulated adult use. cannabis laws (although not all of them are implemented yet), and the pool of enterprising business owners in need of financial services has exploded.
Over the past nine years, Paybotic has engaged over 900 retailers nationwide, from small one-location dispensaries to multi-location cannabis retail chains. The company provides a range of services including card processing, ACH processing, banking services, and specialty cash advances for cannabis businesses. And when it comes to this critical point-of-sale transaction, the company’s card processing enables business owners to offer their consumers a way to pay for their purchases without looking for money in their wallets.
“We are helping to enable these businesses – cannabis dispensaries – to accept cards, like any other business, in a compliant, efficient and cost-effective manner,” Miller said. “There are a lot of financial institutions that refuse to work with cannabis companies because of its federal status, being illegal under federal law. Whether you buy with cash, on credit, with sticks or stones, the purchase of cannabis is illegal, although it has been happening legally in many states for several years. This is the big controversy.
Even if the signing act, the SAFE Banking Act, passes through Congress and retrieves the president’s signature, obstacles to compliance will remain and FinCEN guidelines will continue to place safeguards along this relationship between banks and banks. cannabis companies. Traditional financial services will take time to adjust to the unique circumstances of still tightly regulated cannabis businesses. In the meantime, existing financial solutions for cannabis will start to shift to a more traditional one.
“Our mission is to enable these companies to deal with their customers and their patients, so that people can safely get the products they need,” Miller said. “Transactions are convenient and familiar, just like in any other business, because that’s the way it should be. ”
In the interest of matching this familiar consumer experience, Paybotic has developed its own debit processing that will integrate with current dispensary point-of-sale software and the company’s financial institution, if a relationship is in place. square.
“The solution we have allows these businesses to accept cards over the counter. Consumers can use any card with a PIN code, ”Miller said. “If they only bring $ 20 into the store, they can spend the money in their checking account. They are not limited to the money they have in their pockets. … Simply put, when a business can accept cards, it can accept more money.
Companies like Paybotic can also help cannabis companies connect with cannabis-friendly banks in their own state markets.
Most of the time, whether a bank is “cannabis friendly” is determined through a word of mouth network. This is not a heavily advertised segment of the financial world, as federal compliance pressures are still in place for banks that may be willing to venture into this territory.
Once this bank account is created, dispensaries can begin accepting debit card transactions. When a customer processes a transaction at checkout or with the delivery driver, funds will be deposited into the merchant cash advance bank account within 24-48 hours.
On the customer side of the transaction, everything looks like a typical card transaction. This is an important part of the overall ‘normalization’ conversation taking place in the cannabis space.
And for the dispensary owner, card transactions turn into cash very quickly and there are no transaction costs. “They need their money as soon as possible to keep running the business,” Miller said. “So we’re trying to make our onboarding process as similar as possible to a convenience store signing up for card processing. ”