A Debit Card Payment Solution That Works
Updated: Jun 2, 2022
The cannabis industry has a cash(less) problem.
Marijuana-related business (MRB) is booming in states that have adopted legalization, but in the state-legal cannabis industry, MRBs struggle when it comes to accepting non-cash payments.
While they may be able to access basic banking services, normal payments using debit and credit are often blocked due to some unique challenges.
Simple debit card payments can turn into huge headaches.
Visa, the biggest fish in the payments pond, has been clear that they will not accept MRB debit or credit card payments over their network. Banks and merchants who violate these rules can be subject to heavy fines and penalties.
Meanwhile, MRB revenue is flowing. But cash transactions come with their own sets of costs and risks; think armored car fees, security costs, and theft. MRBs need solutions now.
Other approaches haven’t quite worked.
Businesses have had to turn to creative approaches for cashless solutions.
“Reverse ATM” processes showed promise, but the December 2021 Visa memo unfortunately disapproved of those strategies.
Direct payments and apps working with ACH (Automatic Clearing House) are a workaround, but they’re inconvenient for customers, and they have to be set up specifically for each store or brand.
PayResults.AI is a better solution for debit card payments.
The PayResults.AI approach allows a normal debit card payment to be accepted at MRB merchants, reducing cash transactions, increasing revenue by 20% or more, and reducing the risk of theft and money laundering.
When a customer uses a debit card at an MRB merchant using PayResults.AI, the transaction is routed away from the Visa network altogether. It’s sent to an approved regional card network, so the transaction can be authorized by the card-issuing bank.
Calculations show that 80% or more of all transactions can be processed this way (the remaining 20% cannot be redirected due to the nature of the cardholder’s bank.) Through this process, normal debit card purchases occur, and the merchant receives a settlement of funds in their bank within 48 hours.
This approach addresses network agreement issues between banks and Visa, while eliminating a significant portion of the cash transactions currently dominating the industry.
Why try PayResults.AI?
Until the financial system opens up to the cannabis industry more broadly, financial solutions for MRBs will require some level of workaround. An 80% solution may not be perfect, but perfect solutions require perfect situations, which are still a ways off for the cannabis industry.
With the PayResults.AI solution, your business can:
Reduce 70-80% of cash transactions, thereby reducing costs of cash maintenance such as physical security and armored car services
Receive cash in your sponsoring bank’s account within 48 hours, providing merchants with the convenience of predictable, available, liquid funds
Avoid payment approaches that violate Visa network rules, reducing liability concerns for banks and merchants
Be ready to benefit from legislative changes that lower currently high transaction fees
Lease the debit card device on a monthly basis, reducing risk to you if the payment approach happens to be invalidated by unlikely but unfavorable legal changes
Quickly and easily convert to credit card payments as soon as the legal environment allows - the only solution today that offers this foresight
Find out how PayResults.AI can work for you.
You can set up an appointment to speak with one of our payment consultants at www.finresults.com, or send an email to info@finresults.com to learn more.