As state restrictions on cannabis products loosen, THC products and the businesses that sell them continue to grow in popularity. With this growth comes risk. As the industry evolves, third-party businesses that offer payment processing services and setup are selling solutions that are not fully compliant, and can result in fines, fees, or worse for business owners.
No Ifs, Ands, or Buts — Credit Card Processing for Cannabis Products is Non-Compliant.
Because cannabis is still federally classified as a Schedule I drug, businesses that sell cannabis products, even in states where the sale of these products is legal, are still not permitted to process credit card transactions.
The credit card processing industry is regulated by the PCI SSC (Payment Card Industry Security Standards Council). This is a group of the major credit card brands (Visa, Mastercard, etc.) that created security and compliance standards that any business or entity accepting cardholder data must adhere to.
Common Examples of Non-compliant Solutions
Cannabis-related businesses (CRB Level One) that are “plant-touching” are susceptible to fines and deplatforming if they attempt to process credit cards, as this violates the PCI regulations. Business owners are responsible for ensuring that their payment processing is compliant. This responsibility cannot be transferred to a third party, even if that third party is taking over the setup of the business’s payment processing.
Some payment processing companies will tout “workarounds” that are not fully compliant. Common examples of these non-compliant solutions are:
- Cashless ATMs
- Point of Banking
- PIN debit solutions
- Transaction layering
Cash Only is Not Your Only Option
While credit card processing is not possible for cannabis-related products, and other workarounds risk fines or fees, cash is not the only alternative. Other solutions have emerged that are fully compliant and track legal updates as they happen in the legislature, so you can be sure your payment processing solution will stay compliant.
For example, Green Card is a secure, compliant option that uses Automated Clearing House (ACH) rails for real-time verification of transactions. Basically, it’s a digital wallet that allows customers to pay for cannabis purchases using funds directly from their bank account, bypassing the need for credit or debit card processing.
Learn more about Green Card payment processing.