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.