What To Know About Processing Payments For A Cannabis Business
October 5, 2020 (Investorideas.com Newswire) One of the fastest growing industries to get into right now is the cannabis market. It is still very early on and there is unlimited potential with the right strategy and idea. Since cannabis is being legalized at a fast rate, it is only a matter of time that it becomes legal everywhere.
And luckily, this legalization means that a lot more studies are being done on marijuana and the cannabidiols it contains so there are potential openings in the market even further down the line.
The odd thing is that even though it is legal in many areas, it is very difficult to find a payment processor for cannabis businesses.
In this article, I will go over several ways that you can accept payments and have your cannabis business grow as it should.
1 - Accept cryptocurrency
The most obvious first step is to accept cryptocurrency like Bitcoin. Since cryptocurrency is decentralized, there is no bank that processes the payments so there is nobody that decides that they don't want to. You can accept Bitcoin as long as it is legal to do so in your area.
All you need to do is to create bitcoin account and you can start accepting payments. The other huge benefit is that you'll pay far fewer fees to process the payments unlike with a bank. Usually the fees are a one time fixed fee and the payments happen much faster.
There are also no applications to wade through or a waiting period. There is no authority that you have to answer to when accepting Bitcoin.
2 - Beware of cash only operation
Any business is a potential target for thieves. And a cash based business is an even greater risk. Add marijuana and cash and you have a very volatile situation. You certainly should be accepting cash, but it shouldn't be the only way to accept payments.
When word gets around that you are taking in large amounts of cash, then you will need to have some very good security.
Also, cash businesses often come under higher scrutiny when it comes to the IRS so you will have to make sure that your bookkeeping system is very organized and every detail is accounted for to avoid an audit.
3 - Find a processor that also understands the industry
Another complication in processing payments lies not just with finding a payment processor that will work with a cannabis business, but one that understands it. There are a lot of legal complexities that come with running one and the bank has to understand what it is getting into.
When you are under a lot of scrutiny from authorities, there may be pressure on your merchant service provider to freeze your account if the authorities suspect illegal activity. This can put a damper on your income even when you are doing everything by the book.
Having a service provider that knows this will help when this does eventually happen.
*This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.
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