For over 10,000 years, hemp has been cultivated throughout the Northern Hemisphere for its wide range of uses, first grown for its strong fibers and soon after used in a variety of different products, the hemp plant has been part of the fabric of civilization for thousands of years. In addition to the endless applications in commercial and industrial products, strains of the hemp plant, known as marijuana, have both medicinal and recreational purposes, creating concerns and trouble for merchants trying to set up hemp merchant services for their business.
In the United States, a majority of states have passed legislation that contradicts federal laws on the books about the use of marijuana, while some states only allow the use for medical purposes, other states have also legalized the recreational use of it. Stuck in the middle of these drastic changes has been the hemp plant with its many uses and increasing demand, more and more merchants have decided to enter the hemp industry only to realize that many banks are unwilling to work with businesses in this industry.
Finding a bank that will allow a marijuana or hemp business to establish a bank account has also been a challenging task, as many merchants have been unable to find solutions and forced to only accept cash payments and use cash for business expenses, an inconvenience that has proved to be time consuming and at times even dangerous with large amounts of cash held at the business. A recent solution to the problem has been provided by local some credit unions located in states that have legalized marijuana, along with approval from the Federal Reserve and strict guidelines, merchants have been able to establish bank accounts making the handling of payments from customers and to vendors much easier and safer.
Accepting credit cards and debit cards has become an even more difficult service to find with fewer options available, especially with tight restrictions from the payment card networks and other hemp merchant services providers who refuse to offer their services to industries that they do not feel they want to represent or conduct business with. Even with these roadblocks standing in the way of merchants selling hemp products, there have been some workarounds that have momentarily helped businesses accept payments without the need for significant amounts of cash on hand.
One of the most common solutions that have been available to businesses has been a cashless ATM service that allows customers to make withdrawals from their checking accounts using an ATM machine located in the store. The cashless ATM, also known as a point-of-banking terminal, allows customers to withdraw funds from their checking account by receiving a printed authorization receipt that when turned into the cashier is an accepted form of payment. This type of service can save merchants significant fees due to the fact that the customer will incur a transaction fee and since it is an ATM, the machine will not provide exact payment, so any remaining balance of the transaction will be paid back to the customer with cash from the cashier.
Other solutions that are currently available involve merchants setting up with high-risk merchant services companies to provide them an offshore merchant account or establishing a merchant account through an aggregated merchant account that is managed by a payment processing services. While these services are available, they are not highly recommended and should be used with extreme caution due to the large startup costs, high processing fees and the volatile reliability of many of these payment processors.
Unfortunately at this time, even with our extensive tobacco merchant account provider network, Tobacco Merchant Services is unable to legally provide any type of hemp merchant services, but continue to check back as laws are continuously changing surrounding the hemp industry.