POS

Buying Pot “Starbucks-Style” As Shops Add Mobile Payments

July 24, 2024         By: Steven Anderson

Starbucks is pretty much the poster child for in-house mobile payments, having not only demonstrated how much business mobile payments can bring in, but also what happens when you’re not ready for that kind of business. It’s no surprise to see other brands jumping in as well, like McDonald’s and a host of others. There’s one surprise that recently got in, though…the marijuana market.

Starbucks proved to be a hit with its “closed-loop gift card” concept, and that got the cannabis markets wondering if this wasn’t perhaps something they could put to work, especially given the current climate for such operations. Since most banks and payment processors don’t want to handle these transactions—where they’re not outright illegal, there are conflicts between state and federal law to consider—such markets need alternate solutions. For most, that means cash-only operations, but mobile payments are helping to turn things around here.

That’s where tools like CanPay are stepping in. Operating a closed-loop debit network in 17 states, as well as Puerto Rico, CanPay works with banks to use ACH transactions to process payments. Since this keeps Visa and Mastercard out of the loop, the end result is payments made and processed, business carried out, and life goes on. CanPay, meanwhile, collects two percent of each transaction as a processing fee, and offers up to a $500 guarantee per transaction to protect against fraud.

With state and federal laws at loggerheads, it’s small wonder that the major players won’t get involved in this market. Still, with two percent of all those fees at stake, it’s likewise small wonder a minor player like CanPay wouldn’t get involved, showing us all how the mobile payments marketplace can deliver value to operations, no matter what the field in question. Additionally, it not only provides customers with another choice, but it also gives the dispensaries a better option; having to operate on a cash-only basis can be especially dangerous.

It’s an opportunity for smaller firms, and a potential miss for bigger ones, at least until the laws get properly untangled one way or the next. Only time will tell how this all turns out, but for now, we get a good look at how mobile payments mean value in just about any market.