Upcoming years will be abuzz with businesses trying to create a niche for themselves in the market to tackle competition and offer customers some variety. Cannabis industry serves to be the perfect example of this trend.
With cannabis becoming widely accepted gradually, thanks to its legalization in certain parts of the world, the number of new businesses & products entering the market is only set to grow.
According to Forbes, “Cannabis Could be the Most Profitable Ingredient in Skincare,” with the CBD market growing to $170 million in 2017 and poised to reach $1 billion by 2020.
With the industry witnessing upward trajectory despite certain legal & banking restrictions, many alternative payment processors and merchant account providers have come up to offer payment processing solutions that marijuana merchants can take advantage of.
While looking for a merchant account provider, merchants need to be careful and consider a few points before locking in on one. Here are 5 tips when looking for an MMJ Merchant Account:
Ensure Your Processor Understands the Nature and Complexity of the MMJ Industry
With many legal and health concerns surrounding the use of cannabis, marijuana can be considered a complicated & risky business. And so obtaining payment processing for your MMJ business is not an easy task either. You certainly don’t want to end up with a shady processor who has no clue about the workings of your business.
Hence, ensure that your processor has considerable experience working with similar businesses. More importantly, the provider should be up-to-date with industry legalities and provide a quick solution in case of emergency situations wherein legal authorities might try to freeze your account on the basis of suspicious activity.
Look For a Processor That Offers Variety & Flexibility
Different merchant account providers offer different types of services. Your MMJ merchant account solutions should include a wide range of tools including secure payment gateway, card secure, tokenization, 3D secure, and fraud protection tools to ensure prevention of fraudulent transactions.
Since your business is categorized as high-risk, it is imperative that the processor offers chargeback prevention tools to prevent unwanted fees.
It is also convenient to choose a provider that approves any MMJ related businesses such as CBD products, Hemp oil, cannabis paraphernalia, etc.
Credit Card Processing Rates & Fees
Owing to the difficulties merchants encounter while obtaining MMJ merchant account solutions to take care of their payment processing needs, some providers tend to take advantage of it and charge unfairly high credit card processing fees.
While marijuana is classified as ‘high-risk’ and so your business will have to incur higher fees than the rest, there are processors that will be honest and fair by charging adequate per transaction processing rate and no additional costs.
Ensure that there are no hidden fees involved while signing on the dotted line.
Look For a Reliable & Long-Term Processing Partner That Offers Transparency
Apart from chargebacks & legal difficulties, large monthly processing volumes also make obtaining payment processing for MMJ a complicated task.
MMJ is a lucrative business and therefore will require the provider to process a high amount of volume on a monthly basis. You will find many willing to accept your business at first but will drop you instantly once your business starts to grow.
Always ask your processor how they deal with large processing volumes. Look for a merchant account provider that is transparent, reliable and gives you long term solutions.
Compatibility is the Key
If you are just starting out, always look for MMJ Merchant Account solutions that fit the requirements and demands of your business. You will want a payment processor that offers 24/7 support, technical support and immediate solution to any processing issues.