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How Do Medical Marijuana Dispensaries in St. Louis Accept Credit Cards?

mcarr@stlstreamline.com (Michelle Carr) — Mon, 19 Aug 2024 14:48:59 GMT

How Do Medical Marijuana Dispensaries in St. Louis Accept Credit Cards?

The acceptance of credit cards in medical marijuana dispensaries has always been a complex topic. With the constantly evolving legal landscape and regulatory hurdles, dispensaries face unique challenges when it comes to payment processing. In this article, we will explore the mechanisms behind how medical marijuana dispensaries accept credit cards, the legal and logistical challenges they face, and how partnering with a specialized payment processing company like Streamline Consultants can simplify the process.

The Challenges of Credit Card Acceptance in Medical Marijuana Dispensaries

Legal Landscape

The legality of marijuana, both medical and recreational, varies significantly across states and countries. While some states in the U.S. have fully legalized marijuana, others only permit medical use, and some still consider it illegal. On the federal level, marijuana remains classified as a Schedule I controlled substance, which poses significant legal barriers to traditional banking and payment processing services.
Banking Restrictions

Due to the federal classification of marijuana, many financial institutions are reluctant to offer services to cannabis-related businesses. This reluctance stems from the risk of federal penalties and the stringent requirements imposed by the Bank Secrecy Act (BSA) and the Anti-Money Laundering (AML) regulations. As a result, many dispensaries operate on a cash-only basis, which presents safety and logistical challenges.
Payment Processing Solutions

Traditional credit card networks like Visa and Mastercard do not allow transactions involving cannabis products due to federal regulations. This restriction forces dispensaries to seek alternative payment processing solutions that comply with both state and federal laws.

How Medical Marijuana Dispensaries Can Accept Credit Cards

Third-Party Payment Processors

One of the most common solutions for dispensaries looking to accept credit cards is partnering with third-party payment processors. These companies specialize in handling high-risk transactions and navigating the complex regulatory environment. They offer various services, including:

ACH Payments: Automated Clearing House (ACH) payments allow customers to transfer funds directly from their bank accounts to the dispensary. While not technically credit card transactions, ACH payments provide a digital alternative to cash.
Cashless ATMs: Also known as Point of Banking (POB) systems, cashless ATMs enable customers to use their debit cards to withdraw cash, which is then used to complete the purchase. The transaction is processed as an ATM withdrawal rather than a direct payment.
Cryptocurrency Payments: Some dispensaries accept cryptocurrencies like Bitcoin as a workaround for traditional banking restrictions. However, this method requires customers to be familiar with digital currencies, which can limit its widespread adoption.

Partnering with a Specialized Payment Processor: Streamline Consultants

To effectively navigate the complexities of payment processing in the cannabis industry, many dispensaries turn to specialized companies like Streamline Consultants. Streamline Consultants offers tailored solutions designed to meet the unique needs of cannabis businesses. Here’s how Streamline Consultants can help medical marijuana dispensaries accept credit cards:

Compliance Expertise: Streamline Consultants’ team of experts stays up-to-date with the latest regulations and ensures that all transactions comply with state and federal laws. This compliance reduces the risk of legal issues and financial penalties for dispensaries.
Integrated Payment Solutions: Streamline Consultants offers a range of payment options, including ACH payments, cashless ATMs, and e-check processing. These solutions provide dispensaries with the flexibility to accept various forms of payment, catering to a broader customer base.
Secure Transactions: Streamline Consultants prioritizes security, implementing advanced encryption and fraud detection measures to protect both dispensaries and their customers. This focus on security helps build trust and encourages repeat business.
Consultation and Support: Streamline Consultants provides ongoing consultation and support to ensure that dispensaries can seamlessly integrate and manage their payment processing systems. This hands-on approach allows dispensaries to focus on their core business operations while Streamline Consultants handles the payment logistics.

Steps to Implement Credit Card Acceptance in Medical Marijuana Dispensaries

Assessing the Dispensary’s Needs

The first step in implementing credit card acceptance is to assess the dispensary’s specific needs and challenges. This assessment includes evaluating the current payment methods, understanding the customer base, and identifying any legal or logistical barriers.
Choosing the Right Payment Processor

Selecting a payment processor like Streamline Consultants that specializes in cannabis transactions is crucial. Dispensaries should look for processors with a proven track record, robust security measures, and comprehensive compliance support.
Integrating Payment Systems

Once a payment processor is chosen, the next step is to integrate the payment systems into the dispensary’s existing operations. This integration may involve setting up terminals, training staff, and ensuring that the systems are user-friendly for both employees and customers.
Ensuring Compliance

Compliance with state and federal regulations is paramount. Dispensaries must work closely with their payment processors to ensure that all transactions are conducted legally and transparently. This compliance includes adhering to the BSA and AML regulations and maintaining accurate records for auditing purposes.
Customer Education

Educating customers about the new payment options is essential for a smooth transition. Dispensaries can use signage, brochures, and digital communication to inform customers about the availability of credit card payments and how to use them.

The Benefits of Accepting Credit Cards in Medical Marijuana Dispensaries

Increased Sales and Customer Convenience

Accepting credit cards can significantly increase sales by providing customers with a convenient and familiar payment method. This convenience can lead to higher transaction values and more frequent purchases.
Enhanced Security

Reducing the reliance on cash transactions enhances security for both the dispensary and its customers. Cashless transactions minimize the risk of theft and reduce the need for cash handling and storage.
Improved Record-Keeping and Transparency

Digital transactions provide better record-keeping and transparency, making it easier for dispensaries to track sales, manage inventory, and comply with regulatory requirements. This improved record-keeping also simplifies financial reporting and auditing processes.
Competitive Advantage

Offering credit card payments can provide a competitive advantage in a crowded market. Dispensaries that accept a variety of payment methods are likely to attract more customers and build a loyal customer base.

Conclusion

The process of accepting credit cards in medical marijuana dispensaries involves navigating a complex landscape of legal, financial, and logistical challenges. By partnering with a specialized payment processing company like Streamline Consultants, dispensaries can overcome these challenges and offer their customers a convenient and secure payment option. Streamline Consultants’ expertise in compliance, integrated payment solutions, and ongoing support makes it an ideal partner for dispensaries looking to expand their payment capabilities.

As the cannabis industry continues to grow and evolve, the ability to accept credit cards will become increasingly important for dispensaries seeking to stay competitive and meet customer expectations. By taking the necessary steps to implement and manage credit card acceptance, dispensaries can enhance their operations, improve security, and ultimately drive business growth.

Compliance Card Brand Rules Summary for Non Traditional Pricing

Sat, 04 May 2024 15:09:56 GMT

Understanding Non-traditional payments and compliance

To assist with mitigating noncompliance assessments, we would like to outline the rules that tend to cause the most confusion and the most violation notices. This list is not exhaustive but rather highlights some of the commonly offended rules, including:

Minimum/Maximum Transaction Amounts
Cash Discounting
Surcharging
Convenience Fees
Service Fees

Minimum/Maximum Transaction Limits

In order to minimize processing fees on lower dollar transactions, the card brands allow a Minimum Transaction Limit amount to be implemented for credit card transactions. The rules for implementation are as follows:

Minimum Transaction Limit

A merchant may impose a Minimum Transaction Limit on credit cards. However, it MUST NOT be imposed on a debit or prepaid card.
This requirement refers to the type of card presented for payment and not the method in which the card is being processed (PIN debit, signature debit, credit). Minimum Transaction Limit CANNOT exceed $10.
The cardholder must be allowed to use their credit card for all transactions over $10. A merchant MUST disclose the Minimum Transaction Limit amount to be imposed by placing signage at both the entrance into the location and the point of purchase.

Maximum Transaction Limit

A merchant may NOT impose a Maximum Transaction Limit on debit or credit card transactions.

NOTE: A debit card refers to a card that has a cardholder’s checking or savings account attached to it as a funding source for the transaction. The word “Debit” is usually printed on the card.

Cash Discounting

A merchant may implement a discount to customers who pay in cash rather than a card; however, there are specific rules around doing so. The rules are as follows:

The listed price of the good or service MUST be the price PRIOR to any discounts for payment method.  The discount would then be applied to the price at the point of purchase if the customer chooses to pay in cash.
Merchants are not permitted to post a cash price and then charge a higher price for cards at the point of purchase.
A merchant MUST disclose the Cash Discount intent and amount by placing signage at both the entrance into the location and the point of purchase.

Surcharging

A Surcharge is a fee assessed on credit cards to help recoup all or part of the card processing cost.

Registration is required before implementing a Surcharge. Visa requires a Surcharge indicator to be included in the transaction.
Please check with us to ensure your device can Surcharge properly and is set up to send the indicator. Surcharges must NOT be charged to a debit or prepaid card.
This requirement refers to the type of card presented for payment and not the method in which the card is being processed (PIN debit, signature debit, credit).
Surcharge can be charged in a Face-to-Face and Non Face-to-Face environment.
The Surcharge amount can be fixed or variable, but it must be charged the same on all card brands and all payment channels.
Surcharging cannot exceed the cost of acceptance and is capped at 3%. Note: The cap for Visa is 3% while Discover and Mastercard are at 4% and American Express OptBlue is 3.5%. Given that there is a rule requiring parity across all card brands, the cap of 3% must be utilized.
A merchant MUST clearly disclose the Surcharge intent and amount by placing signage at both the entrance into the location, at the point of purchase, and on the transaction receipt. Disclosure must have the exact amount or percentage of the Surcharge. Disclosure must include a statement that the merchant is assessing the Surcharge and is only applicable to credit transactions.
The cardholder must be given the opportunity to cancel the transaction without penalty after the Surcharge is disclosed.
Surcharging is currently prohibited in Massachusetts, Connecticut, Maine, and Oklahoma (this list is subject to change without notice). Note: When assessing a Surcharge (in accordance with card brand requirements), please also consult your legal counsel as needed, to ensure that Surcharging is permitted by law as it varies by jurisdiction and may not be allowed or may have limitations.
A Surcharge cannot be charged in conjunction with a Service Fee or a Convenience Fee. The intent and definition of these are a bit different and each has their own set of rules (see below).

NOTE: Surcharging rules apply to Visa, Mastercard, and Discover. Surcharging on American Express is only allowed via our American Express OptBlue program. (If you are interested in processing American Express OptBlue, please contact us for information on the program and eligibility.)

Convenience Fees

Convenience Fee is a fee charged to cardholders as a way for a business to recoup some costs involved for offering convenient payment options to cardholders. The card brands rules for implementing a Convenience Fee are as follows:

A convenience fee MUST only be charged when a true convenience for the cardholder is offered as an alternative payment channel to a customary payment channel.
Convenience Fees are ONLY allowed in a non face-to-face environment; NEVER in a face-to-face environment.
The Convenience Fee MUST be disclosed to the cardholder prior to the charge being applied.
A cardholder MUST be given the opportunity to cancel out of the payment/fee (without penalty) and the ability to use the same form of payment at a brick and mortar location (face-to-face).
The Convenience Fee must be a fixed amount; a percentage is not allowed.
A Convenience Fee can be charged on both credit and debit cards.
No card brand registration is required.
Convenience Fees CANNOT be charged on recurring transactions.

Service Fees

Service Fees are used by government and education merchants as means to help recoup the cost of accepting payments. This type of fee is only eligible for select government and education merchant types. The card brand rules for implementing a service fee are as follows:

Registration with Visa is required in order to implement a Service Fee. Upon approval, Visa will assign a specific code that we will place into our system. This will indicate to Visa that the transaction has been approved for Service Fees.
Only the following government merchant category codes are all eligible: 9211 Court Costs, Including Alimony and Child Support; 9222 Fines; 9311 Tax Payments; 9399 Government Services (Not Elsewhere Classified)
Only the following education merchant categories are eligible: 8211 Elementary and Secondary Schools; 8220 Colleges, Universities, Professional Schools, and Junior Colleges; 8244 Business and Secretarial Schools; 8249 Vocational and Trade Schools
The service fee can be a fixed or variable amount and charged on all payment channels.
The fee must be disclosed to the cardholder prior to the charge.

NOTE: Service Fees are a term recognized and defined by Visa only. Mastercard, Discover, and American Express do not recognize this as a unique fee type and do not have separate requirements around it.

In conclusion, it is important that all merchants understand and follow the specific card brand requirements for Minimum Transaction Amounts, Cash Discounting, Surcharging, Convenience Fees and Service Fees as described above. This is imperative in order to mitigate the risk of noncompliance violations and the potential for costly noncompliance fines.

This contains a compilation of information received from various sources.

This information is presented solely for the convenience of the reader and should not be used as a substitute for your own research and reference to actual regulations and/or other official documents or as a substitute for consulting your legal advisor. Evolv, Inc and its affiliates shall not be responsible for any inaccurate, outdated or incomplete information.

What is a Surcharge?

Tue, 30 Apr 2024 11:49:51 GMT

What is a Surcharge, and how can I implement this feature?

A payment card Surcharge, also known as a checkout fee, is an additional fee that may be added to a customer's bill when a credit card is used for payment. This can not be applied to debit or HSA cards.

Effective April 15, 2023, Visa set the maximum surcharge cap to 3%. As a result, when surcharging across all card brands, the three percent cap is inherently applicable to all credit card transactions regardless of the card brand, to ensure all card brands are treated equally.

WHAT YOU NEED TO KNOW

The ability to surcharge only applies to credit card purchases and only under certain conditions.
United States merchants cannot surcharge debit card or prepaid card purchases.
Surcharging is allowed for all merchant category codes but is currently prohibited in the following (4) states: Connecticut, Colorado, Kansas, and Massachusetts.
Merchants must comply with applicable state or federal laws which may prohibit or restrict surcharging of credit transactions.
Merchants must also comply with federal laws regarding deceptive or misleading disclosures.

Click here for current rules and regulations regarding Surcharging.

Frequently Asked Questions about Surcharging

What is a Service Fee?

Tue, 30 Apr 2024 11:47:03 GMT

What is a Service Feed, and how can I implement this feature?

A service fee is an additional fee that may be a flat amount or percentage applied to a transaction which helps you recover the cost for providing a service.

A service fee may be assessed as a flat amount or percentage and may not be charged as a separate transaction. A service fee may be implemented by merchants in the following Merchant Categories:

8211 - Elementary & Secondary Schools
8220 - Colleges, Universities, Professional Schools, and Junior Colleges
9311 - Taxes
9211 - Court Costs
9222 - Fines
9399 - Misc. Government Services
8244 - Business and Secretarial Schools
8249 - Vocational and Trade Schools

If you are not one of these merchant types, please contact your Sales Representative to ensure you are qualified.

WHAT YOU NEED TO KNOW

Registration is required.
You must notify your processor at least 30 days in advance of assessing a service fee.
Service Fees must be implemented according to Card Brand rules, and the type(s) of hardware/software solutions available for each method may also vary

Click here for current rules and regulations regarding Service Fees.

What is a Convenience Fee?

Tue, 30 Apr 2024 11:43:10 GMT

What is a Convenience Fee, and how do I implement this

A convenience fee is a charge passed on to customers for the privilege of paying for a product or service using an alternative payment method that is not standard for a business. A business that traditionally accepts cash or checks for transactions but also offers credit card payments for convenience may charge an additional fee for that convenience.

For example, a movie theater typically sell tickets face-to-face at the box office. However, if the movie theater provides customers with an alternative option to pay by phone using a credit card, the theater could charge a convenience fee. The convenience fee is charged not for using a credit card, but for the privilege of using the pay-by phone option.

WHAT YOU NEED TO KNOW

Registration with the card brands is not required
A convenience fee may only be assessed in a Card-Absent Environment and may not be charged if you operate exclusively in a Card-Absent environment
Convenience fees may not be applied to recurring transactions
Convenience Fees must be implemented according to Card Brand rules, and the type(s) of hardware/software solutions available for each method may also vary

Click here for current rules and regulations regarding Convenience Fees.

What is PCI Compliance?

Tue, 30 Apr 2024 01:23:32 GMT

What is PCI Compliance and why do merchants need to do it?

Payment card industry (PCI) compliance is mandated by  credit card  companies to help ensure the security of credit card transactions in the payments industry. Payment card industry compliance refers to the technical and operational standards that businesses follow to secure and protect credit card data provided by cardholders and transmitted through card processing transactions. Definitions and further details on PCI DSS may be found at the industry supported website www.pcisecuritystandards.org . Failure to comply with PCI DSS can result in significant fines as well as restrictions on the use of payment platforms in the future.

Self-Assessment Questionnaire (SAQ) is an annual requirement. The SAQ is a validation tool for merchants who are not required to do on-site assessments for PCI DSS compliance. This questionnaire should also be updated periodically, should you change how you handle card holder data or at least once per year, and
Security Scans may be required quarterly for any merchant processing cardholder data via an Internet connection. Scans are performed on the external facing IP address(es) to identify potential vulnerabilities. The scan will help you identify necessary steps to protect cardholder data.

Every processor requires that you complete an annual self assessment questionnaire (SAQ). These are cumbersome and difficult to complete and if you don’t keep up with it every year, the processor will charge a monthly Non-Compliance fee.

This is where Streamline and superior customer service comes in. Reach out to your Streamline consultant who will hold your hand through the process. This agonizing chore will go from 2 hours to 10 minutes. You know better…you do better!

What are the benefits of PCI Compliance?

The benefits of compliance include the reduced risk of data breaches, safeguarding cardholder data, and thus avoiding chances for identity theft. Most payment processors include up to

"For merchants who have completed the chip upgrade, counterfeit fraud dollars dropped 76% in December 2018 compared to September 2015" (Visa).

EMV CARD-PRESENT SECURITY REDEFINED

On October 1, 2015, liability for non-EMV card-present transactions shifted to merchants. Non-enabled merchants can suffer catastrophic financial loss. Chipbased security replaces traditional magnetic stripe data with unique cryptographic transactions, making fraud more difficult and less likely.

TECHNOLOGY & SECURITY COMBINED

The Payment Card Industry Data Security Standard (PCI DSS) is the template by which merchants and their digital security for payment card acceptance and processing is held accountable. Merchants that are not PCI-compliant are liable for fraud and face non-compliance fees because of increased risk.

Most processors offer indemnification coverage if you are PCI Compliant if you experience a breech. Evolv offers a comprehensive PCI compliance analysis, which helps our clients update and maintain their security. Evolv also provides $100,000 in coverage for PCI-compliant merchants.

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How Do Medical Marijuana Dispensaries in St. Louis Accept Credit Cards?

How Do Medical Marijuana Dispensaries in St. Louis Accept Credit Cards?

Compliance Card Brand Rules Summary for Non Traditional Pricing

Understanding Non-traditional payments and compliance

What is a Surcharge?

What is a Surcharge, and how can I implement this feature?

What is a Service Fee?

What is a Service Feed, and how can I implement this feature?

What is a Convenience Fee?

What is a Convenience Fee, and how do I implement this

What is PCI Compliance?

What is PCI Compliance and why do merchants need to do it?

What are the benefits of PCI Compliance?

EMV CARD-PRESENT SECURITY REDEFINED

TECHNOLOGY & SECURITY COMBINED

EVOLV PCI PLATFORM

PRIORITY PCI PLATFORM

FIS PCI PLATFORM