It is critical to have a secure and reliable solution related to payment in place since the cannabis industry is worth multi-billion dollars. As of 2017, in Canada alone, there were about 84 public companies that are in some way associated with the cannabis industry, trading on Canadian stock exchanges. They are collectively worth about $37 billion US dollars. As medical and recreational sale of cannabis legalizes in more states around the world, this figure is expected to grow. In this article, we will talk about the 5 things that you need to check when looking for a reliable cannabis payments solution.
Understanding The Legal Aspects
When looking for a reliable third party to take care of your transactions and processing, make sure you chose a company that understands the legalities involved in the industry. The company should be familiar with the complicated jargons such as FinCEN, CSA, BSA, DOJ and the Cole Amendment. It should know the legal structure of the industry well and be fully capable of dealing with questions raised by the legal authorities.
There are usually two types of payment gateway providers – the eCommerce business models which comes under the medium risk category and high-risk processors that are prompt due to the specific services and products they offer. You may look for a company that offers various tools such as token systems, card storing, 3d secure, fraud protection and so on. These solutions add a layer of protection for the companies to save them from encountering a variety of problems.
When looking for payment solution, look for a provider that does not have any hidden monthly fees that they did not disclosed earlier. Before signing a contract, make sure you read the fine prints and seek clarification on any point that is not clear to you. The providers usually charge a fee on each transaction so there should be no additional set-up or admin fee. You should pay no more than 6% of the total transaction.
Although cannabis has been legalized in Canada and various other parts of the world, there are still many federal and local regulations that a company needs to comply with. When looking for a payment processing company, make sure to ask the provider how they would manage large volumes of transactions passing through their system.
Most companies are equipped to manage transactions when the orders are slow, but once your business starts to grow there might be difficulties. A reliable company will be transparent about their fees and logistics. Always look for companies that can offer to build long term relationships like GetWhitePalm
When you are starting out, we would recommend that you start small and look for a payment gateway provider that suits your specific budget and needs. A good provider will appreciate your business and accommodate when your business as it grows. If not, you may switch the company at a later stage when your business expands. To avoid unwanted hassles, make sure you partner with a company that offers 24/7 technical support so that you can provide round the clock help to your customers.