The 4 Best Cannabis Payment Processing Companies For Dispensaries
Cannabis credit card processing is currently illegal in the US, but there are good alternative options for processing marijuana payments, including cash sales, point of banking, and ACH transfer.
Cannabis payment processing can be confusing and challenging, especially for a new dispensary owner. Although it’s still listed as a Schedule I drug by the Food & Drug Administration (FDA) — and therefore illegal under federal law — marijuana is now legal for medicinal purposes in 38 states and recreational use in 24 states.
With new dispensaries opening around the country all the time, the need for a cannabis credit card processing solution has never been greater.
Unfortunately, such a solution does not exist at this time. Because the issuing banks are regulated at the federal level, all of the major credit card associations (Visa, Mastercard, Discover, American Express, etc.) have firm policies against their cards being used for marijuana sales, even in jurisdictions where it’s legal.
Despite this outright prohibition and intense demand from consumers to be able to use their credit cards at a dispensary, there is currently no legal, secure method to accept credit cards for cannabis sales in the United States. There are, however, viable alternatives to operating on a cash-only basis.
Here, we’ll profile the best providers that work with cannabis businesses. We’ll also discuss the payment methods available to cannabis dispensaries. Finally, we’ll cover the legal issues that make cannabis payments so challenging and give tips to help you find a reputable provider for your business.
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Read more below to learn why we chose these options.
Table of Contents [hide][show]
- 4 Best Cannabis Payment Processors For Dispensaries
- Instabill: Best For International Merchants
- Flowhub: Best For In-Person Payments
- Paybotic: Best For Multiple Payment Methods
- Bankcard International Group: Best For PIN Debit Payments
- Why You Can’t Accept Credit Cards At Your Marijuana Dispensary
- Secure Payment Methods For Cannabis Dispensaries
- Legal Issues With Cannabis Payment Processing In The United States
- What You Should Look For In Marijuana Payment Processing
- Which Cannabis Payment Processor Is Right For My Dispensary?
Table of Contents
- 4 Best Cannabis Payment Processors For Dispensaries
- How The Best Cannabis Payment Processors Compare
- Instabill: Best For International Merchants
- Instabill
- Instabill Pricing
- Instabill Features
- Flowhub: Best For In-Person Payments
- Flowhub Pricing
- Flowhub Features
- Paybotic: Best For Multiple Payment Methods
- Paybotic Pricing
- Paybotic Features
- Bankcard International Group: Best For PIN Debit Payments
- Bankcard International Group Pricing
- Bankcard International Group Features
- Why You Can’t Accept Credit Cards At Your Marijuana Dispensary
- Secure Payment Methods For Cannabis Dispensaries
- Legal Issues With Cannabis Payment Processing In The United States
- What You Should Look For In Marijuana Payment Processing
- Which Cannabis Payment Processor Is Right For My Dispensary?
4 Best Cannabis Payment Processors For Dispensaries
A cannabis payment processing account is simply an account that allows you to accept noncash payments for cannabis products. These accounts almost always come with higher fees and more restrictive policies than traditional low-risk merchant accounts, and do not allow credit card payments in the United States.
Here are the best companies we’ve found that can provide payment processing services for your cannabis dispensary:
- Instabill: Best For International Merchants
- Flowhub: Best For In-Person Payments
- Paybotic: Best For Multiple Payment Methods
- Bankcard International Group: Best For PIN Debit Payments
How The Best Cannabis Payment Processors Compare
Vendor | PIN Debit | ACH Transfer | Cryptocurrency |
---|---|---|---|
Instabill | |||
Flowhub | |||
Paybotic | |||
Bankcard International Group |
Instabill: Best For International Merchants
Pros
- Offers debit payment processing option
- Offers cryptocurrency option
- Reputable company with a proven track record
Cons
- Does not accept startups
- No offshore merchant accounts for US-based businesses
- Typically requires a six-month rolling reserve
Why Instabill Is The Best Choice For International Cannabis Merchants
Instabill is a veteran high-risk provider that offers some payment processing services to medical marijuana dispensaries. The company is very transparent about accepting cannabis merchants, and its website includes specific information about which payment methods are available and which particular business types are supported.
Instabill clearly discloses who it works with, what payment methods are available, and what limitations you'll have to accept. We're particularly impressed with the disclosures regarding the need for a reserve account -- something most providers won't tell you about.
Getting approved for a cannabis merchant processing account with Instabill will require four to six months of previous processing history, which could be a real challenge in this industry. Account approval requires anywhere from 10 business days to two weeks.
Flowhub: Best For In-Person Payments
Flowhub |
---|
Pros
- Offers PIN debit payments
- Offers ACH payments through Aeropay
- Offers fully integrated POS system
- No long-term contracts
Cons
- Not well-suited to delivery-only dispensaries
- Expensive monthly fees for add-on services
Why Flowhub Is The Best Choice For In-Person Payments
As a dedicated cannabis payment processor, Flowhub offers a variety of products and services custom-tailored to the needs of dispensaries. While Flowhub isn't cheap, you can save a lot of money (and handle multiple locations) by bundling services under a custom pricing plan. The company also offers great customer support, with an extensive knowledgebase on its website and email and telephone support. Integrations with a wide variety of third-party services designed exclusively for the cannabis industry make it a great all-in-one choice for your dispensary.
Flowhub offers both PIN debit and ACH payment options to cannabis merchants, although your customers will have to download and install the Aeropay app on their mobile devices to use the latter option.
Paybotic: Best For Multiple Payment Methods
Paybotic |
---|
Pros
- Offers PIN debit, eCheck and ACH payments
- Processing hardware available
- Wide range of ancillary services for dispensaries
Cons
- No publicly disclosed pricing
Why Paybotic Is The Best Choice For Multiple Payment Methods
Florida-based Paybotic specializes in serving the CBD and cannabis industries. It's been in business for over 10 years -- a long time in these industries -- and has the experience to help you run a legally-compliant dispensary. Paybotic is one of the most experienced cannabis processors in the industry, and offers a full range of services for retail, eCommerce, delivery, and curbside pickup business models.
While the company doesn't offer any specific pricing information, you pay only a single monthly fee for your account. Transaction processing costs are passed onto your customers in the form of a convenience fee, which helps to keep your costs low and predictable. Online feedback from merchants is mostly positive, which is more than we can say about most of the major traditional credit card processors.
Bankcard International Group: Best For PIN Debit Payments
Bankcard International Group |
---|
Pros
- Offers PIN debit payments
- Support for ACH & eCheck payments
- Provides outstanding educational resources
Cons
- No publicly disclosed pricing
- No feedback from merchants available
Why Bankcard International Group Is The Best Choice For PIN Debit Payments
Not to be confused with North American Bancard, Bankcard International Group (BIG) is a fairly new high-risk payment processor that offers specialized support for cannabis businesses. Founded by a group of payments industry veterans, BIG offers payment processing accounts for CBD, cannabis, and other high-risk industries.
Bankcard International Group provides the most extensive educational resources on the intricacies of legitimate cannabis payments processing that we've found to date. It's also one of the few cannabis providers we've found that's accredited by the BBB, and has had zero complaints since accreditation. The company's most appealing feature is that it offers a fully transparent, legally-compliant PIN debit processing solution -- something that can help you avoid operating on a cash-only basis and significantly increase your overall sales volume.
Get Started With Bankcard International Group
Why You Can’t Accept Credit Cards At Your Marijuana Dispensary
While many dispensaries are able to operate successfully on a cash-only basis, this strategy can put you at a competitive disadvantage compared to businesses that offer a variety of payment methods. Customers have become accustomed to using their credit cards for the majority of their purchases, and most of them expect to be able to use their cards everywhere, whether it’s at a restaurant or a cannabis dispensary.
Unfortunately, it’s currently not possible to legally use a credit card to purchase marijuana products in the United States, even in states that have fully legalized them.
Cannabis is still a Schedule I controlled substance under federal law, and the banks that issue credit cards are regulated at the federal level. Since the credit card processing networks that are used to process credit card payments have to comply with federal law, they cannot permit any cannabis sales to be processed over their networks.
Visa, Mastercard, Discover, and American Express have each stated publicly that they will not permit their cards to be used for cannabis sales, even if it’s legal under local state law. If you get caught trying to do it anyway, you’ll quickly have your merchant account shut down, and you’re very likely to be placed on the Terminated Merchant File (TMF) or MATCH list.
The proposed Secure And Fair Enforcement Banking Act (SAFE Banking Act) would change all of that, allowing banks and credit card processors to accept credit card payments for cannabis products in states where they have been legalized. Unfortunately, the bill is currently stalled in the Senate, with no indication that it will be passed anytime soon.
Likewise, proposals to de-list marijuana as a Schedule I drug haven’t made any progress, and such action appears unlikely in the near term. If this does eventually happen, dispensaries would be free to open traditional merchant accounts and start accepting credit card payments like any other business.
Secure Payment Methods For Cannabis Dispensaries
With credit cards off the table for now, cannabis merchants have had to get creative in finding ways to securely accept payments from customers. Here’s a summary of the most popular solutions currently in use:
Other alternative payment methods, including cryptocurrency payments and Point of Banking (or “cashless ATMs”) are either no longer available or not recommended. While still offered by some cannabis payments providers, cryptocurrency payments are simply too volatile to be a safe solution for your business. Likewise, Point of Banking solutions came with a number of problems that caused the major credit card associations to withdraw support for them in 2022. Therefore, cashless ATMs are no longer a viable payment method for your dispensary.
Legal Issues With Cannabis Payment Processing In The United States
The cannabis industry is unique in that its primary product is both legal and illegal simultaneously, thanks to conflicts between the laws of the United States government and those of many US states. This situation creates a number of difficulties for dispensaries struggling to operate a legitimate business in cannabis-friendly states. Here’s a brief rundown of the major issues to be aware of:
What You Should Look For In Marijuana Payment Processing
With a few notable exceptions, finding a good marijuana payment processing provider for your cannabis business involves the same criteria as finding a good low-risk provider. It’s just much harder to find a provider that offers the right combination of reasonable prices, fair contract terms, and high-quality customer service. Here are the most important considerations:
Which Cannabis Payment Processor Is Right For My Dispensary?
Although we’ve given you four recommendations to start you on your search for cannabis payment processing solutions for your dispensary, there isn’t any single company that’s the “best” — or even the most affordable. You’ll want to find a provider that offers the best fit with how you want to run your business. Moves to legalize marijuana use for medicinal and recreational use in many states have created a tremendous business opportunity for cannabis entrepreneurs, but they’ve also created a hopelessly fragmented and complex legal landscape where compliance with the law is both challenging and essential to the survival of your business.
With that in mind, be aware that nothing in this article should be construed as legal advice. We strongly encourage you to seek out the services of a business attorney in your local area who can assist you in staying within the bounds of the law as it currently exists. We also recommend that you steer clear of any payment processor that promises to allow you to accept credit cards for cannabis products for the reasons discussed above. For selling cannabis-related products, where you can accept credit cards, one of our recommendations for the best high-risk merchant account providers should be able to help you.
If you’re just getting started in the marijuana industry, you’ll have a lot of other concerns as well. Check out our articles on financing a medical marijuana dispensary and getting a high-risk business loan to help you launch your cannabis business. Good luck!