Cannabis Dispensary ATM: A Safe and Convenient Way to Buy Cannabis

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A cannabis dispensary ATM is a safe and convenient way for customers to buy cannabis. Cashless ATMs used to be a viable workaround to the banking system. But since some of the largest payment processing networks have been cracking down on cashless ATMs for cannabis payments, cash remains king for the cannabis industry. 

If you are thinking about adding an ATM machine to your cannabis dispensary, look no further for a reliable and reputable ATM provider. Having a dispensary ATM makes it much easier for customers to pay with cash and offers many other benefits. 

If you are an independent ATM deployer (IAD) or ATM vendor, look into cannabis dispensaries for placement opportunities as long as your ATM processor is accepting them. There is a growing market for the dispensary ATM as the cannabis industry continues to battle the traditional banking system. 

The End of the Cashless Dispensary ATM

Cannabis is still illegal at the federal level. Regardless of individual state legislations, dispensaries have, for the most part, been unable to accept debit and credit transactions for cannabis-related goods and services. 

Since banks are federal institutions, they are bound by certain regulations when it comes to providing services to businesses in the cannabis industry. Credit card companies won’t allow these transactions to take place over their networks, either. 

Cashless ATMs used to be a viable solution. Customers could make cannabis payments with debit or credit cards because these transactions were reported as ATM withdrawals processed through a point of sales (POS) system. 

However, Visa and Mastercard raised concerns that this process of “disguising” cannabis transactions as ATM withdrawals violated the credit card companies’ terms and conditions. Other ATM transaction processing companies have since followed suit. Now, cashless ATM transactions are one of the most controversial and dangerous cannabis payment options.

As a dispensary owner, offering cashless ATM payments for cannabis can put you at a high risk of noncompliance. Your business could even be shut down as a result. Therefore, you should consider alternative payment options.

Benefits of Cannabis Dispensary ATM

While cash does come with its own risks, a cannabis dispensary ATM offers many benefits for customers and therefore for the dispensary itself. An on-site ATM increases customer loyalty. It puts customers at ease using an ATM inside your store. And, three quarters of customers are more likely to impulse buy when an ATM is available.

Having an on-site ATM machine offers customers a convenient way to make cannabis purchases and a safe way for the dispensary to accept cannabis payments on top of experiencing increased sales and revenue.

Cannabis dispensaries benefit from on-site ATM machines the same way any other business does. They experience an improved customer experience, increased sales, and an extra revenue stream. 

Improves the Customer Experience

Having an on-site ATM machine, in a cannabis dispensary or otherwise, provides customers with quick, easy access to their accounts. Customers can use a dispensary ATM to withdraw the cash they need to make cannabis purchases. 

Quickly-evolving ATM technology can also add a level of professionalism to your dispensary. With extra security features like biometric authentication and AES encryption and steganography that ensure secure data transfer for ATM transactions, customers can feel safe and secure using your dispensary ATM rather than a competitor’s. 

Some ATM machines can also be configured with bitcoin capabilities. If you want to accept cryptocurrency as a form of payment, this can offer your customers another option that competitors don’t. Drawing in crypto-curious customers could even increase traffic to your dispensary and expand your customer base.

Cameras add another layer of security. Genmega ATMs, for example, include the Gencam which documents the ATM user, practically eliminating any discrepancies or chargebacks. The camera can show the user’s face on the screen so the user can see their own image. The camera takes two pictures of the user during the transaction. The first picture is taken while entering the pin number and the second while the cash is dispensing. Both images are stored on the journal for easy access.

And of course, having an on-site ATM prevents your customers from having to make more than one stop. This is more convenient for them and creates a more positive experience.

Increases Sales

By offering the convenience of ATM services at your dispensary, you will bring in more traffic, turn away less customers, and therefore increase the opportunities to make sales. You might also find that customers end up spending more than they planned once they already have the cash in hand. 

Keeping customers in your store rather than sending them to the nearest bank or convenience store increases the chances that the money they withdraw gets spent at your location. And, you don’t pay any extra fees for cash transactions. So the more cash transactions you accept, the more you save on credit card processing fees. 

Adds Extra Revenue Stream 

If you want to own and operate your own dispensary ATM, you will need to establish yourself as an ATM business owner under an LLC or business entity that isn’t associated with your cannabis dispensary. Sometimes, it is easier to have a friend or relative whose name isn’t associated with the dispensary do this.

If you have an alternate business and bank account set up, you can operate the ATM yourself. This would allow you to collect the whole surcharge fee. This is an additional revenue stream. The fee per customer ATM cash withdrawal can add up fast!

More commonly, cannabis dispensaries will work with third party ATM operators like an IAD. If you don’t know anyone in the ATM business, you can send in an ATM placement services. Just indicate your needs and preferences, and a third party will place an ATM in your dispensary. The ATM operator can handle some or all of the maintenance.

How Does an ATM Placement Program Work?

An ATM placement program pairs your business with a third party ATM operator such as an IAD. When you send in your ATM placement request, a well-established, certified, locally vetted hands-on ATM business operator will be tasked with placing an ATM in your dispensary.

This operator will assist you with any ATM services and responsibilities of ATM ownership you’d like covered. This could include ownership of the ATM, cash vaulting, or servicing. ATM operators typically make sure the ATM is stocked with cash, clean, up-to-date on software, and free of any error codes.

You just need to indicate whether you are interested in full ATM placement or partial. Full placement would include all three aspects of operation provided by an experienced ATM business operator. With partial placement, you would work with an IAD to develop a successful ATM program. In this arrangement, you would split the surcharge revenue.

And, there are no monthly fees, statement fees, or monthly minimums when processing with ATMDepot. This means that you reap all of the benefits of having an on-site dispensary ATM without the compliance, ownership, and operation hassles of an ATM for dispensary sales.

How Does ATM Vaulting Work?

The cash in ATMs must meet congressional Bank Secrecy Act/Anti-Money Laundering rules. Essentially, ATMs must be loaded with clean cash. Vaulting an ATM with recycled cash straight from the cash register is considered money laundering. The vault cash must be deposited into a bank and then withdrawn from the account to load the machine.

Of course, you can outsource the cash vaulting. Funds withdrawn from the ATM are referred to as “vault cash” or “vault funds” and are sent back (settled) to the vaulter’s designated bank account accordingly. Then, these funds are withdrawn to load the ATM again, so on and so forth. 

Banks are becoming increasingly responsible for monitoring and reporting any suspicious financial activity to the Financial Crimes Enforcement Network (FinCEN). The activities of non-bank ATMs in cannabis dispensary locations are particularly scrutinized. FinCEN considers them to be especially susceptible to money laundering and fraud. Failure to remain compliant could get your on-site ATM machine shut down, whether you own it or not, leaving you with dissatisfied customers.

Cash is King in the Cannabis Industry

Not only will an on-site dispensary ATM offer customers a convenient, hassle-free way to make cannabis purchases, but your dispensary can also benefit from increased sales and revenue. With the dangers and risks involved with cashless ATMs, it’s time to start thinking about alternative payment accommodations for your customers, whether it be a traditional ATM or a bitcoin ATM.

As a cannabis dispensary business owner, you can opt for an ATM placement program. This alleviates a majority of the responsibility of maintaining the ATM machine. Instead, an IAD owns and manages the machine for you. Although you might forfeit some or all of the surcharge revenue, you still benefit from the improved customer experience and professionalism an on-site dispensary ATM provides.

IADs, check out your local dispensaries and surrounding businesses to see if there are opportunities for ATM placements. Since cash is still king in the cannabis industry, this is where your market is!

Interested in getting an ATM machine in your business? Get your ATM startup kit today, or send in an ATM placement services. Either way, make sure you offer your customers a safe and convenient way to buy cannabis with a cannabis dispensary ATM.

The Best Banks for ATM Business

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The best banks for ATM business can be hard to find. Not only are a lot of banks hesitant to take on an ATM business bank account, but bank relationships are also very subjective. So you might find that opening an ATM business bank account on the recommendation of others isn’t a foolproof plan.

That includes recommendations from ATM industry experts. ISOs that work with hundreds of IADs and help them set up their ATM businesses can really only collect data from their collective experiences. And many have found that there is no one-size-fits-all answer for finding ATM business friendly banks.

However, while it can be difficult to find banks that allow ATM business accounts, we do know why banks are hesitant. And we therefore know ways you can increase your chances of finding banks that support ATM business in your case. So keep reading to find out what you need to do to open an ATM business bank account.

Why is it Hard to Find ATM Business Friendly Banks?

Many IADs mistakenly believe that banks want them as customers no matter what type of account they need to open. They believe that banks should be begging for and bending over backward to earn and retain their ATM business bank account.

In reality, however, an ATM business bank account requires a lot of work and does not make a lot of money. So, many banks are hesitant to take on these high risk, low reward accounts. Banks with ATM business bank accounts are typically subject to more audits to ensure compliance with anti-money laundering laws because of the cash-heavy nature of ATM businesses.

Then there are the added tasks of counting all of the cash and even keeping enough on hand for your vaulting needs to begin with. And as your business grows, that volume will grow too. 

Banks make money off of their customers’ account balances. That is the money that the bank invests into loans and other products that earn them interest payments. Little of customers’ deposits are actually held as cash at the bank. And ATM business bank accounts typically maintain low account balances.

So not only do banks see an ATM business bank account as more trouble than it’s worth to open, but banks can also close accounts that cost more to maintain than they make. It can be difficult to convince a bank to work with you and your business, but it also takes some effort on your part to prove that your ATM business bank account is worth keeping open.

The Best Banks for ATM Business

Banks undergo audits to ensure they comply with anti-money laundering laws. Because of their size, larger, tier 1 banks are under more scrutiny than local regional banks, community banks, and credit unions. However, while this can make tier 1 banks less likely to accept ATM business bank accounts, it doesn’t mean it’s unheard of.

Smaller banks, on the other hand, are less likely to be able to support a cash volume over $5,000. That’s a lot of 20s, and some might end up being bad bills. You will need to inquire with the bank when you go to open an account to see whether they have enough cash for your needs and if they don’t, whether they are open to getting more to be able to service your account. 

Speak to the person who orders cash from the armored service for the branch as they usually deliver weekly. They can ask when they can place a cash order to be included with the bank’s cash order so they can be sure they have enough 20s for you.

Tier 1 financial institutions with the worst reputations for denying ATM business bank accounts and closing others are Wells Fargo, Bank of America, and JP Morgan Chase. But there are still plenty of IADs who have ATM business bank accounts at these institutions.

In our experience, the best banks for ATM business accounts are the ones where you already have other accounts and good relationships. 

How to Improve Your Chances of Opening an ATM Business Bank Account

Offer to Purchase Multiple Products

An ATM business bank account typically maintains a low balance and does not make the bank much money. But other accounts do: savings accounts, CDs, lines of credit, loans…. 

So if you are looking for banks that accept ATM business accounts, your chances of finding one are better if you can offer to purchase these other products or to move your existing accounts to the new bank. These multiple accounts make you a money-making customer. You will then be especially enticing to smaller banks who are more eager for your business. 

Start with Existing Relationships

We also recommend starting with a bank you already have a relationship with. Set up a meeting with your current bank manager to discuss your ATM business banking needs. If they turn you down, look elsewhere and consider moving your accounts to the new bank to encourage them to take you on.

Bank with More than One Institution

It can be a good idea to have accounts at more than one institution. Accounts that cost more money to maintain than they make can be closed. Normally, a bank gives at least 10 days notice before closing an account unless they suspect unethical or illegal activity. 

If this happens to you, your ATM business will be put on pause unexpectedly until you can get set up at another bank. This is wasted time that you’re not able to generate income. So it can be a good idea to have a backup account at another institution.

Sometimes, the bank will help you by referring you to another institution. This is another reason why it’s important to maintain a friendly relationship with your banker. 

Be Open and Honest

Regardless of where you start, make sure you are open and honest about your ATM business banking needs. This facilitates a healthy relationship between you and the bank and is a better way to make sure your account doesn’t get closed out of the blue. 

It also helps to make sure that the bank can even handle the volume of cash you will need. You will also want to make sure they are open to working with you as your business and cash volume increase over time. 

Tell them how much cash you will need, how frequently, what denominations, and how much will be in your account regularly. This will give them a good idea of what to expect so that they are prepared to handle your account if they agree to open it. The bank can then advise you to order the cash you need to be added to their armored delivery.

Being up-front also lets you know whether or not the bank has experience with ATM bank accounts. Banks that haven’t had many ATM bank accounts might be eager for the business and then find out later that the account is too much for them to manage. 

It’s best to find a bank that knows ATM businesses and their needs. Banks that offer ATM business banking will usually have a questionnaire and a procedure. This helps them with their yearly audits where they will need to know where the IAD ATMs are, the names and addresses of the locations, and the average monthly usage in dollars withdrawn.

Be Respectful

As you have these conversations with these financial institutions, be polite and understanding. Remember, your ATM business bank account is going to require a lot of work on the part of the bank employees—and they don’t have to accept you as a customer. 

If the bank expresses hesitation or declines your account, understand that ATM business bank accounts are risky for them to take on. You won’t accomplish anything by being rude or angry. It will just confirm their decision to not want to do business with you. 

You can always ask for a referral to another bank. Many bankers have worked at other financial institutions and know other bankers. Being nice and even giving some token of appreciation can go a long way. 

Be Prepared

There is some documentation that banks can request in order to open an account for your ATM business. This can include a copy of your IAD processing agreement, copies of your SLA agreements with your merchants, and your business paperwork showing your a licensed or registered business with the city or county. Just ask your ATM vendor ahead of time to help you access these documents.

The bank might even ask for transaction statements that show a history for the last 12 months for all of your ATMs if it applies. Jump through as many hoops as the bank asks you to. Get all documentation to them promptly. Show them that you are serious and organized.

Show Gratitude

If you are successful, be appreciative. Be friendly and patient with the bankers. Surprise them with cards or gifts or snacks. If you become a friendly face that the bank employees are happy to have around, they will be sad to lose you as a customer. This can help protect your account from spontaneous closure.

Third-Party Alternative Vaulters

If you are still having trouble finding banks that accept ATM business or your bank is unable to handle the volume of your cash needs, you should ask your ATM vendor if they offer armored carrier service or have 3rd party vaulting options. Ask if they have delivery and pickup services to avoid the cash volume issue altogether.

You will have to pay for this service, of course. But working with third party alternative vaulters is safe, hassle-free, and they take care of the cash loading for you. 

ATMDepot has a trusted network of third-party vaulters that currently work with us and our IADs. We work with third party vaulters in the following cities and have armored service in many others on an as-needed basis:

  • Los Angeles, CA
  • San Diego, CA
  • Fort Myers, FL
  • Chicago, IL
  • Las Vegas, NV
  • Newark, NJ
  • New York, NY
  • Columbus, OH
  • Lancaster, PA
  • Nashville, TN
  • El Paso, TX
  • Houston, TX

This is a good option for those who want to operate an ATM business but don’t have a bank yet or the funds to load their own ATMs in these cities.

ATM Friendly Banks by State

While we can’t guarantee any bank will accept your ATM business, here is a list of some ATM business friendly banks we’ve garnered from various feedback and sources. 

ATMDepot.com and its parent company Intelligent e-Commerce, Inc. make no guarantees that financial institutions listed below will offer ATM business bank accounts. Each financial institution and branch has its own acceptance policy. 

This is not a comprehensive list and should not be the definitive guide. There are many more banks than what we show here. Just because we list one or two banks in a state does not mean they are the only ones that accept ATM businesses. It just means we know an IAD who may use that particular bank. 

It’s very difficult to say a particular bank does not work with IADs when in some cases they do. We work with a tier 1 bank, US Bank, but have been with them for over a decade and have more than just an ATM account. 

Bank managers can often decide on a case-by-case basis if they want to work with a particular IAD. When you open your account, be sure to maintain the relationship and use other banking services like credit cards, loans, and more. That can help you better than just going by this list.

Choose a state to view the banks list

How to Find the Best Banks for ATM Business

Bank relationships are very subjective. You might find that one person’s experience with the best banks for ATM business differs from the next. You might encounter people with the same tier 1 banks that support ATM business that you are having trouble with. Each state is different, too. 

If you want to know what banks accept ATM business accounts and what banks don’t, your best bet is to get out there and find out. Remember, the best banks for ATM business accounts are those where you have good relationships. Not only will banks appreciate you having multiple accounts and products, but they will also be less likely to close your ATM business bank account, leaving you out of business.

Start with your current bank. Inquire with small local, regional credit unions and community banks. Research known ATM business friendly banks in your state. And if cash volume is an issue, look into a third party vaulting service.

If you still have questions or need any help, contact us today!