The Absolute Best Cannabis Credit Card Processors - Reviewed

As more states are legalizing both recreational and medical marijuana, dispensaries are starting to pop up everywhere, all over the United States.

The cannabis industry is set to explode in the coming months, which means these merchants (aka business owners) need to know how to find the best marijuana payment processing companies.

Maybe you’re one of them.

If so, there’s a lot you need to know to get started with accepting credit card payments.

Maybe you thought your business had to be cash-only, but there are several companies that offer merchant account services for dispensaries. You just need to know who to reach out to.

Our Picks for the Top Marijuana Credit Card Processing Companies

Easy Pay Direct
High-risk merchants including those in the cannabis, CBD, and hemp space
Good for high-risk industries
Very few negative reviews
Single Point of Contact for Multiple Merchant Accounts

summary

5/5

Best for

E-commerce companies, SaaS companies, "high-risk businesses", & established small/medium businesses ($500,000+ in annual sales)

Specializes in

Easy Pay Direct has unique gateway software and banking solutions to optimize payments for eCommerce, SaaS, information products, supplements, and CBD amongst other verticals.

Pricing Summary

Setup Fee:  $99

Monthly Fee: $24.95

Swipe Rate: 1.59% + $0.17

Keyed-in Rate:  2.39% + $0.29

Early Termination Fee: $0 (domestic accounts)

Contract Terms:

1 Year 3 Years
eMerchantBroker
High-risk ecommerce and retail merchants
Works with any size high risk business.
No setup fee.
Variable rates depending on the merchant's volume.
Merchants are notified whenever a fraud or chargeback occurs.
Checks are allowed to be accepted from customers.

summary

4/5

Best for

eMerchantBroker is best for any size business that is considered high-risk. It's considered one of the top payment processors for high-risk businesses that would otherwise have difficulty finding a standard merchant account provider. 

Specializes in

eMerchantBroker specializes in credit repair, collections agencies, adult websites, travel and timeshare, firearms and guns, bankruptcy and bad credit, online and in-person smoke shops. They also work with electronic cigarettes and other companies that fit into the high-risk merchant account category.

Pricing Summary

Setup Fee: $0

Monthly Fee: Undisclosed

Swipe Rate: 3.00% + $0.15

Keyed-in Rate: 4.00% + $0.25

Early Termination Fee: Up to $595

Contract Terms:

1 Year 3 Years
PaymentCloud
Merchants with high-risk, adult businesses
No setup fee.
No monthly fee.
Every business has a dedicated account manager to serve them.
Merchants have access to around the clock seven day a week support.
Account setup within twenty-four hours.

summary

4/5

Best for

High-Risk Merchants

Specializes in

High Risk

Pricing Summary

Setup Fee: None

Monthly Fee: None

Swipe Rate: Unknown

Keyed-in Rate: Unknown

Early Termination Fee: Unknown

Contract Terms:

Is it Legal for Cannabis Merchants to Accept Credit Card Payments?

A lot of merchants believe that it is illegal for them to process credit card payments for marijuana. But that is not exactly the case.

In the United States, our major banks and credit unions are regulated by the federal government, and because cannabis is illegal under federal law, there is a higher level of risk involved.

In 2013, the Department of Justice issued the Cole Memo, which precludes attorneys from going after legal marijuana businesses that are complying with their own local state laws and regulations.

So there’s a bit of a gray area here.

As a cannabis dispensary merchant, you can process credit card payments for the products you sell; you just need to know how to do it correctly.

What are Cannabis Merchant Account Services?

It all starts with setting up the right merchant account services. You’ll need two things.

A merchant account (or preferably more than one), which is where the money will go that you bring in for sales, and...

A payment processing company that will take care of accepting payments from your customers, getting approvals, and moving your funds into your merchant account(s) before depositing it into your business bank account.

There are high-risk merchant account providers that offer both.

Why Should You Consider Accepting Credit Cards for Cannabis?


Research
 has shown that there are more people paying for what they buy with credit cards and debit cards than with cash.

In fact, only 19% of people prefer to pay with cash, which means 81% are using some other form of payment.

People prefer the ease of using cards, and they tend to do business with companies that cater to that preference.

What are the Alternatives?

Of course, you don’t necessarily have to accept credit cards at your dispensary. There are other ways to sell your products, but they can be viewed as sketchy, and we don’t recommend them.

Instead of working with a cannabis payment processing company, you can:

  • Just continue accepting cash payments only, but this method is likely to result in lost revenue.
  • Lie about what you sell, or mask it with something else. For example, “sticker” stores are becoming popular in New York (buy a sticker, get a free gift of cannabis).
  • Offer cashless ATM services. This is done by processing the payment as a debit card transaction, including the amount of any transaction fees. Most of these operations get shut down quickly.
  • Accept electronic checks and ACH transfers for payment. This requires the use of a special app, which can be hard to get customers to download.

Any of the above can be problematic, which is why we recommend working with a company that has successfully worked with other cannabis merchants to process their payments the right way.

Why are Marijuana Merchants Considered High-Risk?

In addition to the legality involved, there are other reasons why cannabis businesses are considered to be high-risk.

Chargebacks

All businesses experience chargebacks, but in the cannabis industry, this risk is even higher.

A customer who purchases a product from your dispensary to help with a certain ailment might not be satisfied if it didn’t work for them. But by that point, they can no longer return it.

Many customers will resort to filing a chargeback with their credit card company at this point. The more chargebacks you have, the higher your risk level.

And the higher your risk level, the more likely it is that you could end up losing your merchant account services.

Merchant Category Codes

Because selling cannabis is still illegal under federal law, there are no merchant category codes (MCCs) that can be used for sales.

To get around this, it’s common for merchants to use MCCs for other types of products, but if you’re not careful, this can cause you to lose access to your merchant account.

Fortunately, there are merchant account providers that specialize in working with cannabis businesses, and they understand this dilemma and how to solve it.

How to Choose a Cannabis Payment Processing Company

Moving forward with working with a marijuana credit card processor is a wise choice. But you don’t want to just choose the first one that comes up in your Google search.

Taking the time to do your homework can pay off big. Here’s what you want to look for.

Check Their Reputation

When considering a cannabis merchant account provider, make sure to get an idea about their reputation within the industry. Here are a few questions you might want to ask:

  • Have they ever abruptly terminated a merchant account? If so, why?
  • Do they offer merchant accounts in the United States or offshore?
  • What are their online reviews like?
  • Do they have a profile and a good rating with the BBB?

Try to learn as much as you can before you choose. The more you know, the more informed your decision will be.

Look for Transparency in Pricing

Any marijuana credit card processor should be completely honest with you about pricing and fees. The key here is transparency, and you don’t want to be surprised later by learning about a bunch of hidden fees.

The average rate for cannabis processing as of this writing is around 5.95% + $0.30 per transaction. Of course, this amount can vary.

You will also most likely have to pay annual and/or monthly fees, and you may need to have a rolling reserve, which is typical for high-risk merchants.

A rolling reserve means that your merchant services provider will hold back a percentage of your sales for a rolling period of six months. This can help to cover any chargeback fees you may incur.

Gauge Their Reliability

The last thing you want is to choose a payment processor that struggles to keep its software online. That’s annoying for you and for your customers; not to mention it could cost you business.

Don’t forget to ask what a provider’s average uptime is, but be suspicious if they refuse to tell you.

Ask About Scalability

The cannabis industry is set to become a $43 billion industry by 2025, according to Forbes.

That means that if your business model works, you could be making a lot of money very soon, but only if your payment processor can grow with you.

Your credit card processing company should know about this projected growth, and they should have everything in place to scale with you as you experience it in your business.

Tips on Choosing the Best Cannabis Merchant Account Provider

Now that you’re ready to do some real research and begin talking with marijuana payment processing companies, there are a few additional tips we want to offer you.

Tip #1: Read All Contracts Carefully

It’s easy to get so excited about opening your business or accepting credit card payments that you overlook your contract’s fine print.

Take a step back and a deep breath. You’re going to want to go over your contract carefully before you sign it.

It’s best to avoid getting into a long-term contract with a merchant services provider. Some of them offer 3-5-year contract terms, and if you’re not satisfied with their services, getting out of your contract may be next to impossible - or at the very least, extremely expensive.

If you can choose a provider that will allow you to partner with them on a month-to-month basis instead of for several years. Those companies are less likely to have high termination fees attached to their contracts.

Also, please keep in mind that if you need a POS system or terminal from your provider, that might result in a separate contract altogether that carries its own terms.

The same rules apply - read it carefully and be 100% OK with any fees you are charged if you need to cancel.

Tip #2: Open More Than One Merchant Account

When you’re in a high-risk industry, there is always the chance that something could go wrong and your merchant account could be closed. The best providers (like the ones on our list) know this, which is why they offer ways to help.

One of those ways is to open more than one merchant account for your business.

By diverting payments to more than one merchant account, you’re lowering the risk of losing a substantial amount of money because of a processing issue.

For example, let’s say one of your merchant accounts has 20 chargebacks in one month. That’s a lot, and it might lead to that particular account being frozen for a period of time.

If that’s your only merchant account, you won’t be able to access those funds for the time being, which could hurt you financially. But if you have more than one, suddenly that frozen account becomes just a minor inconvenience.

Tip #3: Never Settle for Less Than Excellent Customer Service

Sometimes problems occur, and when they do, you want to know that you can rely on your processor’s customer service team for help.

If you can, find a company that offers customer service and tech support around the clock.

That way, you won’t have to have your customers come back later or contact them when any issues get resolved, which could result in lost business.

Bonus Tip: Avoid Leasing Your Payment Processing Equipment

When at all possible, do everything you can to not lease POS systems or credit card terminals. Equipment leases are expensive, and you could end up paying a lot more for your hardware than you would have if you had just purchased it outright.

Also, keep in mind that you can sell your wares with a virtual terminal or payment gateway too. There are fees attached to both, but they are much less expensive than pricey equipment leases.

If you already have equipment, that’s great! Make sure the payment processing company you choose to work with will be able to integrate its software with it. That should cut way down on your fees.

Before We Go...Find the Best Cannabis Payment Processors Here

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