Do you own a cannabis business? If so, did you know that nearly all banks refuse to process payments for your industry? According to Paybotic, Cannabis is legal in many states, but it is still federally illegal, which means that most banks won’t work with marijuana-related businesses because they are afraid of being penalized by federal banking regulators. Luckily, there are plenty of options available for processors who want to do business with people in this sector. For example, e check payment processing is a hassle-free method that can be used as an alternative to cash and credit cards.
What is an e-check?
E-checks are just like traditional paper checks, except the transaction occurs electronically between your bank and the recipient’s account. Your customer will write their checking account number on the check and include any other required information. Then they sign the check and mail it to you. The transaction will not be processed until your company has received the check. The processing time can vary on this payment type, but it is usually just two business days before the funds are released to your account. This is an improvement over credit cards that can take up to three weeks actually to receive the money in your account.
Setting up e-check payment processing with a cannabis management service provider is simple and secure. Plenty of options are available online if you’d like to research what’s best for you. You can also connect with a vendor specializing in working with companies in the legal marijuana field, so they know all about your industry and will have no problem setting everything up for you quickly.
Differences between ACH and e-checks
E-checks are similar to traditional paper checks, but they’re processed electronically rather than with pen and ink. The money is not withdrawn until the check has been received, so the issuer can’t bounce or be stopped, making ACH payments reliable. Transfers usually take between one and two business days to complete. Federal law requires banks to wait two days before releasing funds from an ACH transaction for this reason.
Electronic checks are very different from ACH transfers. E-checks are processed almost immediately once your customer submits them to you electronically, whereas an ACH transfer must first be accepted into your account. This means that echeck transactions clear much more quickly, at around 24 hours on average.
Benefits of e-check processing for cannabis businesses
Is an e-check good for a business loan?
The future of marijuana is looking bright, even though it still faces challenges from the federal government. Support for legalization has never been stronger and more people are starting to accept this industry. E-check payment processing is common in many countries around the world, so taking advantage of this type of payment can be very profitable for your business.
Quicker than credit cards
The money for an e-check is not deducted until your business has received the check. This means there is no risk of the payment being declined if you try to process it immediately. Unlike credit cards, there is no waiting period.
More secure
E-checks offer better protection from fraud and chargebacks since they are processed similarly to cash payments. Customers also feel safer about doing business with your company if they know that you accept e-check processing.
Give buyers more payment options that can be easily integrated into their accounts
Customers will appreciate the convenience of having multiple payment options for their cannabis products or services, especially when one of them is an electronic check. This way, they don’t have to pay using cash every time, and it will be easier for you to collect payments. Convenience is key to getting paid, so adding this option could boost your sales revenue tremendously.
Less costly than credit cards
Credit card processing fees are steep, especially if you have a high sales volume in your business. E-checks are just as safe, but they are much more affordable because they do not charge service fees each time someone wants to purchase something using this method of payment. So when you consider everything, e-check processing is the way to go when you own a cannabis business. It will help keep your business in good standing financially while giving your customers another viable option.
Payments are more secure
No personal information is shared during the transaction process. The customer will not have to worry about identity theft with this type of payment. E-checks are a safe method of payment that you can use to accept money from customers. This is a great option for cannabis businesses because it will protect both you and them from unwanted security breaches.
Saves Money
E-checks are less expensive than using bank wires or money orders. There are no hidden fees or complicated processing procedures to worry about. This makes it easy for you and your customer, so it’s great if you want to keep things simple without sacrificing security.
Final Thoughts
Using this tool will ensure that your business stays afloat. Your bank may not want anything to do with your industry, but e-check processing lets you keep doing what you love without having to worry about these types of problems.
As you can see, there are plenty of reasons why people in the cannabis industry should consider electronic check payments when they run their businesses. Being able to take e-checks ensures that you won’t have any financial setbacks. Operating a legal marijuana company shouldn’t be so hard.
