Important Features Every Dispensary Payment Processor Needs in 2021

US cannabis retail sales are expected to grow exponentially in the coming years. Experts estimate that the total revenue might hit $45.9 billion by 2025. This is mainly because more states continue to legalize both medical and recreational marijuana. 

The perpetual demand for cannabis and its products has spiked the urge for weed vendors to introduce more payment options in their dispensaries. This is due to the increasing number of clients who prefer to use different payments than cash.

However, the main hurdle that faces the industry is the stringent regulations and political opposition that is hindering the incorporation of more payment schemes. 

Read on to discover features to consider when looking for a payment processing platform. We also discuss some of the cannabis payment methods that you can use in your dispensary.

Features That You Should Look for in a Payment Processing Platform

A high number of Americans transact using cards. This has made it necessary for dispensaries to incorporate it in their payment options. Hence, you should base your payment processing platform on the following parameters:


When looking for a payment processing platform for your dispensary, settle for one that will comparatively save you money. You can conduct brief research of the available providers to find one that has the best score. Different payment platforms have different charges for credit card processing.

There are also other vital features that you should take into consideration. These include tip acceptance, inventory management, and auto-syncing. These are cost-saving additives in a payment processing platform. You can take advantage of them to reduce your day-to-day transaction costs. It's also wise to look for a platform that has critical features that benefits your dispensary directly. Don't settle for a generic one-size-fits-all solution.

Multichannel Payments

Having multiple options that consumers can use to make payments can increase your sales. This is because customers love flexibility and convenience whenever they are making a purchase. 

By having multichannel payment options, you will also have a chance to analyze how different platforms differ from each other. You can as well periodically add new payment platforms to elevate business competitiveness. 

When choosing a payment processor, go for a system that allows you to use a wide variety of payment options. Others might limit you to only two or three options. 

Integrated Payment 

It's recommended that you choose a payment processing platform compatible with other tools in your business. This emphasizes efficiency and fast dispensary payments. The result is increased competitiveness of your business. 

Such systems minimize invoice reconciliation and redundant data reviews. This ensures that payments are easy and business rocks on profit margins. It is also time saving, as you can instantly conduct payment processing activities.

Mobile Payment Support

Mobile support is becoming an inevitable trend in cannabis payment processing, as well as other businesses. With the ongoing Covid-19 pandemic, mobile payments have become a necessary feature in every payment process.

Mobile payments come with a handful of services. These include mobile card swipers and tablets, among others. They are ideal, as they do not require the presence of a physical card. And their flexibility allows payments to be made from anywhere. 

You can blend in mobile payments with integrated payment platforms. The two create a payments system that covers all business needs in one package. 


A dispensary payment processing system should be easy to navigate. Simplicity is engineered by user-friendliness, ease of use, and adaptability in numerous payment environments. 

You should decide on a system that makes it easier to locate tools and key features. Its interface design should be simple. Complex designs may negatively affect your revenue and customer activities. Moreover, a system that can accommodate business growth and unexpected changes is good for dispensary payments. 

Data Analytics

In recent years, data analytics have become a prominent tool in enhancing business growth. In cannabis payment processing, data analytics provide insights into business performance. They’re also pragmatic in predicting customers' takes on different payment schemes. 

Data analytics allow you to analyze desired payments options, historical business performance, and foresee future financial stands. This enables you to make sound decisions that will promote seamless business growth. 

Digital Security Parameters

Cybercrime is a significant crisis for almost every business entity. Thus, you should countercheck the security compliance of a payment processor for your dispensary. 

Every payment service provider who claims to be top tier should comply with Payment Card Industry Data Security Standard (PCI DSS). It applies to all providers regardless of whether they are integrated or conventional platforms. 

Compliance with PCI DSS ensures that payments are conducted via secure platforms and that customers' financial data and statements are inaccessible by third-party culprits. Other security parameters to check are Transport Layer Security (TLS) and tokenization.

You should take adequate time discussing such matters with the payment provider that you have chosen. This will find any potential cracks that can disseminate business financial information.

Customer Support

Choosing a payment solution that has reliable customer support can enhance the problem-solving process in your business. There are some cases where a customer requests a chargeback on a submitted order. A reliable customer support team should handle such situations without causing chaos. This is because the quality of customer service affects your business performance.

You can conduct further research by asking the payment processing company about their techniques of solving disputes. They should also enlighten you on fraud protection and how to minimize future disputes. 

Dispensary Payment Options

Here are some of the most common payment solutions that you can use in your dispensary.


A considerable percentage of marijuana dispensary payments are conducted through cash. This is because it's the most available and direct payment method that businesses use. Though people think that it is a low-cost method, it comes along with numerous restrictions. First, it has lower customer spending. This is because it's very rare and risky for someone to carry huge amounts of cash. Credit and debit cards can execute purchases of up to five times the amount that direct cash can handle. 

Secondly, cash payment imposes a greater risk of making losses. This is due to human error when counting. After business closure, managers spend a lot of time counting and checking whether there are any discrepancies. The whole process is time consuming and can lead to inaccuracies.

Thirdly, payments using cash have created a hotspot for criminal activities. Apart from external thefts, loss of cash can also be caused by unscrupulous dispensary staff. Thus, dispensaries invest more in security to monitor staff and other theft activities.

Other inevitable costs of handling cash are bank charges for transport and deposits. Moreover, with the current pandemic, there is a hygiene risk of handling paper money. Nonetheless, this is the number one option for most dispensaries

Automated Clearing House (ACH)

This involves transferring money from one bank to another without depending on cards, checks, or wire transfers. This cannabis payment processing method is common for dispensaries that are not willing to handle physical cash but do not have a point of banking solution. 

ACHs are electronic transfers, which means that they allow for instant verification. Dispensaries can confirm that the funds are present in the customer's account and transfer them to their bank account. That is why they are deemed simple, secure, legal, and reliable. 

The underlying hurdle is the requirement of third-party solutions. Customers must register via the third-party system and download an app. This allows them to check into the dispensary via the app. If the dispensary's point of sale is integrated, the customer feeds in their four-digit code to check them out. 

Point of Banking

This is a rarely used cannabis payment processing method. It's commonly known as a cashless ATM. It permits consumers to access their bank accounts at the point of sale. Rather than cash dispensation, payments are directed to the dispensary bank account. 

Its operation mechanism imitates traditional ATMs. A customer inserts the bank card and enters their PIN. However, they don't get the cash at hand. Instead, it proves that dispensary payments have been debited from the customer's account to the business's bank account. These transactions have a convenience fee on the total amount. However, different merchants have different fee charges.

Point of banking is deemed as the future of cannabis payment processing. This is because it is reliable and satisfactory for both parties. Additionally, debit transactions have lower processing costs compared to credit cards. 

Another reason why this method is gaining popularity is the risk mitigation of handling huge sums of cash on site. Also, most consumers are searching for dispensaries near them that accept card payments. Hence, having a point of banking payment system will elevate your income thresholds. 

Debit Cards

Debit cards may seem identical to point of banking and ACH, as they all use bank cards. But debit transactions follow different protocols. They are similar to credit card processing, which is quite risky to use.

Most debit companies prefer not to work with cannabis businesses due to the industry’s limited legality. Debit companies use mechanisms that scrutinize merchants to find out if they are conducting a cannabis business. Though they may not identify the activities instantly, you will eventually fall into the trap. 

The loss will apply to not only the day's revenue but also a shut down to the merchant account. Hence, it is recommended that you avoid debit card transactions even when other dispensaries in the industry are using them. 

Credit Cards

Many consumers prefer credit card payments, as they are easy to understand and common payment options. A recent analysis claims that 83% of Americans between 30 and 49 years have a credit card. This means that most people in the United States prefer card payments rather than cash, making it hard for dispensary owners to resist card payments. 

But you should refrain from using credit card payment processing. This is because the cannabis federal law restricts payment processing using credit cards. Anyone luring you toward accepting such deals would be exposing your business to risk. Hopefully, there is light at the end of the tunnel. The increasing cannabis legalization may soon alter the federal stance and allow credit card companies to recognize the businesses as valid and legal. 


It's no doubt that cryptos are the future of money. They have overtaken numerous payment options, and dispensaries have followed suit. This is an ideal payment option, as it's digital, anonymous, and completely secure. 

However, few dispensaries have incorporated cryptos in their payment schemes. This may be due to the future financial uncertainty that cryptocurrencies hold. It is also a little tedious to request customers to download the app and deposit their funds. 

Another hindering factor is that there is less or no support when things go haywire. Despite digital currencies picking up at a rapid rate, it's way too early to jump on the crypto bandwagon as the best payment solution.

The Bottom Line

The legal use of cannabis and its products has increased cannabis financial transactions. However, numerous hindrances are thwarting the growth of the industry, creating limited options for cannabis payment processing. 

When seeking a new cannabis payment processing platform, you should look for factors including data analytics, simplicity, integration with other business tools, cost savings, mobile support, and multichannel diversity. Customer interactions and support are also essential, as they boost business-customer relationships. 

Cash is a common payment scheme but carries numerous potential risks. The main challenge is that it creates hotspots for crime. There is also a huge burden for managers counting cash. Other methods that dispensary users use are credit and debit cards. However, card involvement in dispensary payments may result in bans and penalties for your business. Digital currencies are also creeping in, though they pose a major threat due to their volatility. 

That said, the future of cannabis payment processing seems promising. The SAFE Banking Act and MORE Act are working to this sector. There are also more than 700 banks and credit unions that are willing to incept cannabis payment processing.