cannabis payment processor

Cannabis Payment Processing Guide

February 23, 2021

Cannabis businesses are different from other businesses because of the terms surrounding its legality. Yes, CBD (cannabidiol), which is extracted from cannabis, has been legal since 2018 according to the Farm Bill. This may be confusing since many payment processors are yet to support payments for cannabis products. The reason being that cannabis businesses are still considered high risk. The laws are different around the world and each country or state seems to have different restrictions, making it difficult to avoid legal issues.

In this article, we will help you with tips for cannabis payment processing. We will discuss the available cannabis payment options, look at various payment methods for selling cannabis products, and a guide to setting up debit card facilities for your dispensary.

Payment Options for Cannabis Stores

There are a limited amount of options for cannabis businesses when it comes to accepting payment for reasons we discussed earlier. The good news is that there are still decent options. We will talk about some of these here.

Cash Payments

One of the first payment methods is that of cash. Of course, it is still an option for cannabis businesses. Let’s look at the pros and cons of cash payments.


  • You don’t have to worry about legal restrictions like you would when choosing a payment processor.
  • It is widely available since many people have the option to carry cash.
  • It is direct and lets customers make a payment without any issues.


  • It is impractical to keep large amounts of cash and it is less secure than electronic payments.
  • It may be less accurate since human error is involved when counting cash and giving change.
  • It may limit customers’ spending amount since they only carry a certain amount of cash.

Debit Card Payments

This is a more modern payment method that is now supported in almost every store worldwide. It is based on using a card machine where customers can insert their debit card to make an electronic payment. This is a preferred payment processing method and stores who implement it notice an increase in their sales. Let’s look at some of the pros and cons of using debit cards.


  • It is a quick and easy payment method.
  • This is not a subject to human error – the machine takes the exact amount that’s needed from the card so there is no need to count change.
  • Automates the accounting side of things since you can view all the transactions on a banking statement.


  • Banks charge a fee for debit card transactions.
  • The money in your account is not as readily available as cash.
  • Reconciliations of accounts are important and might be tricky for business owners without accounting experience.

EFT (Electronic Funds Transfer) Cannabis Payment Processor

An EFT (Electronic Funds Transfer) is another example of a cannabis payment processor. This is where customers can transfer money from their bank to the store using a banking or cellphone app. They get the store’s banking details and send the money electronically. This is a great payment method for businesses who are unable to set up debit card facilities. Let’s take a look at some of the pros and cons.


  • These payments are made directly to your bank account.
  • You won’t lose clients if you do not have debit card facilities because not all of them carry cash.
  • This is a good cannabis payment processing method for clients who live in another state or country.


  • There is usually a waiting period for the money to clear in your account, particularly when payments are done internationally or from different bank services.
  • Payments need to be done accurately or funds can be transferred into the wrong account.
  • This payment method is not immediate and is usually done when the customer leaves the store, you run the risk of having to ask customers to make payment later.

ACH (Automated Clearing House)

This cannabis payments processing method is similar to EFT but it allows you to ensure that the payment is done immediately before the customer leaves the store and business owners can verify that the customer has funds. It works by using a third-party solution. Two popular options for canna-businesses are Hypur Pay and CanPay. Let’s look at some of the pros and cons.


  • You eliminate the risk of allowing the customer to pay later since it is immediate.
  • The customer does not need a card and you do not need to set up a debit card facility.
  • It is an accurate payment method.


  • Customers have to register with the third-party system and download their mobile app.
  • These payments are processed in batches, meaning you have to wait until a certain amount of money has been transferred before getting the funds.

Why Cannabis Stores Cannot Accept Credit Cards

This might be frustrating since many customers want to make payments using credit cards as a cannabis payment processor. The reality is that federal laws prohibit the use of credit cards for cannabis-related products. Many canna-businesses are taking the risk and accepting credit card payments but banking facilities have built algorithms that can tell them if credit cards are being used as a cannabis payment processor and they will freeze your account eventually and result in legal issues and profit loss. It is simply not worth taking the risk.

The Bottom Line

When choosing the cannabis payment processors that you want to implement in your business, avoid methods that come with a risk. There are so many options for business owners. The important thing is that you accept at least two to three different methods so that your customers have different options. This will decrease the loss of sales in your business due to customers walking out because of limited cannabis payment processors.

If you choose our company to develop a CBD Website for you, we’ll attach a payment processor for you as well so you can collect payments for the CBD products you sell easily.

Want to start selling CBD online?
Check out our turnkey eCommerce solution for CBD Sellers!
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