5 Tips for Choosing a Cannabis Payment Processing Solution (2018 Guide)

Processing made easy
Nicole Richter / Updated on May 3, 2018

Does it seem believable that legal sales of recreational and medical marijuana were around $6.7 billion in 2016 alone, with that number only continuing to rise as more and more states agree to legalize cannabis?

We are here to explain that this statistic in fact, is 100% true, yet still those that own and run both recreational shops and medical marijuana dispensaries face many challenges because of a refusal of major banks, as well as the federal government when it comes to financial cooperation. Because cannabis is a controlled substance on a federal level, many financial organisations treat legal businesses selling marijuana products as criminals, denying them financial support, as well as a way to safely store their profits.

Furthermore, many dispensaries must run cash only businesses, which can lead to a vast increase in dangerous and frustrating circumstances, which will be discussed in further detail later in this article. There are some ways to maneuver around current laws, methods that are not only legal, but also in benefit of the owner/operator of the dispensary or online shop. These alternative solutions are often referred to as cannabis payment processing solutions, but there are some details to observe when choosing the right one for you and your business.

Keep reading to learn 5 brilliant tips about choosing a cannabis payment processing solution or jump to the bottom of this article and find out who is the BEST marijuana merchant service provider of 2017.

Cannabis Payment Processing Current Laws

Although progress is developing, as of 2017, only around 300 of the 11,000 operational banks will comply with legal marijuana companies or vendors. 300 may seem like a grand and fair number, but these acceptant institutions very often require extra fees or further efforts on the vendor’s side, in order to agree with supporting the company and its decisions.

Federally speaking, cannabis is still part of the Controlled Substances Act, so major banks that often can provide easily accessible financial support and loans, make themselves off limits to any businesses related to marijuana, typically stating that if they are a federally regulated institution they, “don’t process payments for businesses participating in federally prohibited activities”, which of course includes cannabis. If a bank opens its doors to anyone in the cannabis industry, even a company legal on the state level, these institutions put themselves at risk of being seized by the Federal Deposit Insurance Corporation (FDIC), and many of these well-known, financially supportive institutions simply do not want to take the risk.

In fact, JP Morgan and Chase and Bank of America have both stated a clear refusal of having any associations with any company or person involved in the marijuana industry, because they can produce enough profit by other means.

Independent banks seem to be more flexible and willing to cooperate with those related to the legal cannabis market, with some small institutions in Colorado even specifically seeking to support the marijuana vendors within the state, because of the opportunity for both making money, and also assisting the local economy. Technically speaking, although so many corporate, big institutions are terrified of getting involved with cannabis, in 2014 a directive from the Financial Crimes Enforcement Network (FinCen), claimed that banks were actually authorized to service and support businesses with ties to cannabis, so long as they comply fully with anti money-laundering regulations, as anyone would expect.

In summary, it is technically legal for a bank to support a legal marijuana business, so long as they take the necessary steps and regulations into account, but many banks simply choose not to because, for them, it is not worth the risk of the Federal Government getting involved.

Why Large Banks Won’t Process Marijuana

As mentioned above, marijuana is highly illegal on the federal level, even if each state has the right to recognize marijuana in its own way, many regions voting to completely drop any charges related to the medicinal substance. Because banks are federally connected institutions, they also typically rely upon regulations and laws set by the Federal Government, and many institutions believe that if they support something considered illegal in the eyes of the Feds, they are also subject to greater scrutiny and could be investigated, or even legally punished. For banks with high assets and plenty of investments, by accepting marijuana related businesses through their doors, they are not only putting the company at risk, but also the status of the assets and the money of any investors involved in funding the bank. If some trouble was to arise, it could be devastating and global banks like Bank of America, Wells Fargo, JPMorgan and Chase, etc., simply don’t see that the benefits would outweigh the risks.

This, of course, is the personal choice of each banking institution, but it does not make their actions any more fair to the sometimes small business owners that are running legal marijuana operations.


Businesses Are Forced to Work Cash Only (Implications)

For the majority of marijuana business owners, running a cash business is their main option, and even if this solution might not sound so awful, there can be sometimes dangerous implications when all of your profits are being collected with digitally untraceable papers. Many credit card/debit card operating systems won’t even allow a cannabis vendor to set up a payment marijuana processing system under their bank, so as profits rank in higher, the cash register becomes more full. Having plenty of income is usually a great thing, right? Not if you are netting hundreds of thousands of dollars, with no where safe to store it.

It is a fact that cash only businesses are not only at a higher risk of employee thefts, but also at a much higher risk of robberies. Most medical marijuana and recreational cannabis dispensaries hire full-time armed guards, specifically to combat any issues they might have with shady criminals entering the business, willing to hurt those working just to get in on some of the cash profits. A guard might not seem like such an immense compromise, but it does not guarantee safety of the company 100 percent, for example in circumstances where the guard might become outnumbered, and also it often costs a pretty penny to be paying for security at all hours of operation, and sometimes even after the doors have been closed. Crimes are so prominent, in fact, that in 2014, 17% of marijuana dispensaries in Colorado experienced some sort of robbery. In the eyes of robbers, hitting up a gas station might maybe send you home with $50, but if they were to rob a cannabis dispensary, they could easily steal $100,000 on an average profiting day. That is why these criminals see cannabis institutions as a better target, along with their immense holding of paper money.

If the Federal Government would allow banks and financial institutions to cooperate with cannabis vendors and companies, it would actually deter away some crime from areas where the dispensaries are located. With less cash equals a lowered risk for theft or robbery, which can sometimes turn out to be a violent, frightening occurrence. Legalization of marijuana, has already done wonders for pushing weed out of the black market’s hands, helping to lower crime in that aspect, so why not support legality on the financial side and continue to lessen the incentive for criminals to have an easy access way to commit crimes.

Marijuana Payment Solutions Are On the Rise

Marijuana payment solutions are on the rise, because cannabis companies are looking for legal methods to get around the strict banking laws so that they do not have to store their profits in cash, which of course is thoroughly explained above.

Marijuana payment solutions are not only legal and safe, but also can prove to be quite inexpensive, and in the end profitable. There are numerous solutions available on the internet, and can be found using a simple google search, but as with most areas where money is involved, not every company offering “fair services” should be trusted. In order to make your experience with a cannabis payment processing provider friendly and simple, we have generated 5 valuable and knowledgeable tips to make the choice and transaction a breeze.

5 Tips When Looking for a Marijuana Payment Solution

Cannabis Payment Processing Solution

1. Ensure your Payment Processing Company Understands the Complicated Jargon.

Nothing in this world is easy, and that goes for payment marijuana processing solutions as well. In this article we explained that marijuana processing is not an easy task and the last thing you want to do is put your business in the hands of a bucket-shop merchant that does not know how to deal with the legalities involved within the industry.

To process marijuana requires experience and a deep familiarity with FinCEN, BSA, DOJ, CSA and the Cole Amendment as they apply to different financial institutions. It’s important that your payment processing company understands the legal structure of the cannabis industry and more important, knows how to deal with unpleasant situations where legal authorities suspect suspicious activity on your account and may try to freeze your money.

Tip – Look for a provider that understands all legal aspects and will always give you quick access to your money. Its important to use a proprietary gateway that ensures that its credit card processing is stable, secure and uninterrupted. Furthermore make sure they accept Visa, MasterCard, Amex and Discover, and have no a Visa card with no limit.

2. Look for a Company that Offers Variety

Different companies offer different payment processing services. As with most things in life, having a wide variety to choose from is key to accessible flexibility. In general, there are two major groups of payment gateway providers; the first is eCommerce business models which tend to be classed as medium risk businesses. The second is high-risk processors which have been recognized as more chargeback prompt due to the specific products or services they provide. Some of these businesses include gambling, dating, traveling etc. Payment processors that work with these type of industries have a wide range of tools such as card storing, token systems, 3d secure and other fraud protection tools that allow them to monitor transactions and prevent fraudulent ones. These payment solutions offer an addition layer of protection to prevent their partners from encountering problems and unwanted chargeback fees.

Tip – Your Cannabis processing solution should have a well designed system that aims to address issues within the cannabis industry and is compliant with federal and local regulations and laws. Make sure the company can provide a merchant account for any cannabis related business including, eCommerce, CBD and cannabis paraphernalia.

3. Monthly fees, Set-Up Fees and Gateway Fees

Honest companies will likely not charge monthly fees, and they will make that very clear to you ahead of time. When choosing a marijuana payment provider its important to understand the whole picture before you sign any marijuana processing contract. Most providers will charge a fee on every transaction and therefore, set-up costs and admin costs should be free of charge. Also be careful about blended fees. These fees will tend to surprise you later.

In addition, the marijuana industry is still classed as a high risk industry and therefore transaction fees will be higher than many other industries. Look for a cannabis payment processing solution that charges an adequate fee but doesn’t charge additional costs. Don’t pay more than a 6% flat fee + 0.30 cents per transaction. Trust us, the processing company will be making enough money from your transactions anyway.

Tip – Make sure you find a cannabis processing company that has no hidden fees, no termination fee, no monthly fees and don’t pay more than a 6% flat fee.

4. Transparency is the Key Issue.

It’s important to remember that marijuana is still classed as a schedule 1 drug and therefore there are federal and local regulations and laws that a reputable processing company must comply by. When seeking a marijuana payment processing company it is important to ask them how they deal with large volume passing through their system. Many processors will more than happily transact your money, but when your business starts to grow they will leave you hanging. The more transactions that are processed through their gateway, the more they have to account and be responsible for those transactions. Always look for a long term partner that can provide a complete solution and is entirely transparent about all fees and logistics from the beginning.

Tip – When choosing a payment solution, ask them how they deal with monthly volume above $10,000. Also, seek a processor who is anxious to build a long term relationship and not just close the deal.

5. Start Small – You’ll get better support.

We’re all in this fight together. Marijuana payment processing companies very directly rely and work with cannabis vendors and businesses, so they will want to support the small fries as much as possible. Maybe they will also be there to make an income, but a good payment processor will show their appreciation for your business. When working with a processor that cares you won’t get random emails from “Mr. Robot” containing general templates or have to call them 10 times just to get a response.

If you are just starting out and looking for a marijuana processing solution, then don’t be afraid to start small and work with a company that fits your budget and needs. Switching gateways isn’t a pain as switching an eCommerce platform. At first you will want a company that can give you an immediate solution, one that includes 24/7 support, technical support to implement the payment solution on your website and around the clock assistance to overcome any processing barriers. We often see business owners develop an amazing online store on Shopify only to find out that their payment processing company isn’t compatible and will not assist with the setup.

Tip – Choose a company that provides 24/7 support and doesn’t tie you to a contract. It is advised to only commit to a month to month contract.

Final Thoughts About Cannabis Payment Processing Solution

With over 300 banks to choose from its is often hard difficult to know where to start. Here at MarijuanaBreak we have taken it upon ourselves to thoroughly research, communicate and test dozens of cannabis payment processing providers. Our team of experts review companies based on transparency, fees, efficiency, legality and customer support.

Want to find out who ranked #1 on our list and provides a 100% complete solution for top brands in the cannabis industry? Leave your details below and we’ll send you the info by email.

5 Tips for Choosing a Cannabis Payment Processing Solution (2018 Guide)
May 3, 2018
  1. Devorah M

    Perfect solution

  2. Nick T

    Using T1, but their approval rate isn’t that high 🙁 Any other options?

  3. James (SpeedBuds4You)

    Processing fees in this industry are so high. Can’t believe that i am now getting below 6%

  4. Chris R (GGroads)

    Good info and read!

  5. April Harper

    I can’t believe it’s possible to get processing fees as low as 3%

  6. Denise C

    Just signed with them and hope to have my store up in the air by the end of this month. Rob is fantastic. Thanks for the great info

  7. Dorris B

    Amazing solution. Thank you to all the team at MB

  8. MMJgold (Shawn)

    Thank you so much MJ. The information was excellent. Hope to have processing up within the next month

    1. Adam

      Glad we could assist

      1. Jordan T

        Why do other merchants charge such a high rate. I am on a 7% flat fee

  9. Barbara Stovall

    Very well explained.

  10. Mary G

    Wonderful website.

  11. Michelle S

    Big shout out from GGG! Thanks for all the assistance

  12. Rick G


  13. Seth R

    Just got banned from stripe. What is the solution

  14. Josh from Rollitup & Friends

    Great info!

  15. Rick J

    Can’t believe that stripe and paypal have blocked me again. Thanks for this solution!

  16. Jodie F

    Thank you for all the help. Great read

  17. Will M

    Thanks for all the info. Love your site (GreenGrassDaily)

  18. Sammy K

    Great service and informative article.

  19. Maryalice Jones

    These payment processing laws are very helpful.

  20. GreenLeaf Corp Collective

    Sandy here from GLC. Thanks for the help and info, especially in a tough industry like this one.

  21. Craig Simons

    Amazing info and help. Especially to Jonathan

  22. Rick P (Green Grass)

    Awesome solution. Thank you Jonathan and the rest of the team

    1. Adam Tidwell

      Second that. Thank you Jonathan

  23. Saul B

    Great solution! Thx

  24. Jay R

    Been using PP for a while. They keep on blocking my business. Any other solutions.

  25. Sam Cook

    Great info. Thanks for all the help marijuanabreak

  26. Sam B

    Thanks for all the help and info. Great site from the team over at Cannagreenvapes

  27. Joy Nelson

    Thanks for all the information and support. Great site!

  28. Teresa Dupree

    Thanks for the solution

  29. Pamela M

    Thanks for all the info. Superb article

  30. Ashley Ramon

    Thank you guys!

  31. Cody T

    Been a cash industry for years and probably will be unless sessions gets his head out his ass.

  32. James

    Been trying to integrate my shopify store with a new PSP. Seems as if the minute I say the word cannabis everyone goes haywire. So frustrating.

  33. Laura W

    I’ve also had money stuck. It’s annoying. Looking for a good PSP. Can anyone help?

  34. James T

    Looking for a domestic solution. Please help

    1. PBrazell

      Where are you located, I have a payment solution that could help.

  35. Ella B

    We are currently using PP and it isn’t easy. Funds get stuck all the time

  36. Miguel

    So what are the most recommended ones to use in regards to selling accessories and paraphernalia online? I have been running into issues with my retail store.

  37. Robert R

    If anyone is following crypto, it doesn’t look as if it will solve this industry.

  38. Joe B

    Someone needs to fire sessions!

  39. Donald M

    If they would just legalize it already it would solve so many problems

  40. Linda H

    I know that a few businesses have integrated Pot coin, but it is far from the norm. Still traditional processing is needed. Good article

  41. Jonny Luke

    I have heard that Pot coin and Cannabis Coin could work for this industry

  42. Barb Fletcher

    2018 is going to be the year where the allow processing. Fingers crossed.

  43. Brad

    This year will be the year of PotCoin

  44. Bonnie

    You guys run an awesome website. Thanks for the info

  45. Janet Holmes

    Thanks for all the info and your guidance. This industry is tough enough as it is. Great to have people like you helping out

  46. Jerry H

    I have still got money stuck with PP. It’s been 180 days. It’s so annoying

  47. GreenRushAlive

    Great info and tips. Thanks

  48. T Moore

    This industry sucks. Processing is so hard!

  49. James E

    Been using stripe for a while. Just got blocked. Damn processing!

  50. Staci H

    I too have had so many problems with processing. Thanks for the info

  51. Joe

    I had money stuck with T1 for a month. It was a nightmare

  52. Karen S (420Greens)

    Great solutions. I have been reaching a dead end for over a year in regards to solutions. I tried stripe but they shut me down after 2 weeks. Then I moved on to T1. Also there I had problems due to payment delays. Your solution is great. Thanks for all the info

  53. Charles R

    Cash only boys and girls

  54. Amanda Boyd

    Let’s just legalize the plant and then there won’t be any problems

  55. Walter P

    This industry is a tough one. Thanks for all the info

  56. Kody W

    Thanks for the great info and valuable information. Finally got my online site up and running.

  57. Andy Mcgee

    Perfect solution

  58. Howard S

    Excellent article

  59. Josh T

    Excellent solutions!

  60. Tracey Hix

    Excellent info!

  61. Kristen Holt

    Finally got my store online. Thanks for all the help!

  62. Judy (Green4u)

    Marijuanabreak we just wanted to thank you. So far we are very happy with with your recommendation, they are very professional, and provide excellent customer service. Also the payment gateway to our website works very well and the back end system with the reporting functions is excellent…

  63. James S

    Great info and excellent site!

  64. Paul M

    I used to pay transaction fees of 8%. Thanks for all the info

  65. Susie Ashmore

    Was working with PP and it is was horrendous. I used to lose so many online sales. Thanks for the info and help!

  66. Mark Austin

    Finally got my online shop up and running. Thanks for all the help!

  67. Katherine (Green4UCollective)

    Must say that the information on your site is excellent. Thanks for all the help. Banking is a real bitch but the solutions you have are quite creative

  68. Leslie L

    They need to legalize it nationwide. That will solve the problem

  69. GreenKushSuns

    Marijuanabreak, thanks for all the help. Hope to be online within 3 weeks.

  70. 5StarLeaf Collective

    Jim and the team are amazing. Excellent fees and supreme service, thanks for the recommendation

  71. Alan J

    Thanks for all the assistance, your input really helped me with the online process of Kushgramsandfriends. Keep up the good work, you have an amazing site

  72. B & H Deliveries

    The fees from my other processing company were killing me. Thanks for the info

  73. Trish B

    Why is this industry so tough?!?! Papal fees are killing me. Thanks for the alternative

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