Paying for cannabis at a dispensary has always been challenging for both the customer and the dispensary owner. The refusal of major banks and credit cards to work with cannabis companies has resulted in a patchwork of increasingly creative ways to replicate the experience of using debit and credit cards. Many dispensaries often just install an ATM machine in the store for cash purchases, frequently hitting the consumer up for yet another expense to buy legal cannabis. Or the stores create some kind of electronic workaround that has been called into question by banking regulators. Now there is a new product that looks like it will have solved these problems but without the questionable financial gymnastics.
Tech company KindPay has created a closed-loop payment system, which means that it is able to be used only with specific merchants. Similar to other retail stores and industry mobile apps, users can credit their KindPay account with money from their debit and credit card. The mobile app will be able to be used by specific people in the cannabis industry, including dispensaries, growers, and consumers. KindPay is powered by Herring Bank, and according to the company, it is the cannabis industry’s first true closed-loop payment system. It is FDIC-insured and can be used with various debit and credit cards, including Visa, MasterCard, and Discover.
“The development and launch of KindPay has been long-awaited by the cannabis industry,” said KIND Financial founder David Dinenberg, “This new app will allow dispensaries, growers, and consumers alike, to transact transparently and safely. Also, due to the pandemic, contactless and cashless transactions have become safer ways to pay.”
KIND will support participating merchants by providing devices for merchants to process transactions with, as well as an Application Programming Interface (API) to allow virtually any point of sale system to integrate with KindPay.
KIND’s seed-to-sale software systems
Leading up to this groundbreaking mobile app launch, KIND provided software that allowed regulators, in real-time, to know where and how much cannabis and hemp is being grown, processed, or sold. They are a well-respected seed-to-sale tracking software, and now they are getting involved with the payment system side of things. With KindPay’s launch, cannabis merchants that have been traditionally declined will have a reliable and safe payment system to use. Traditional banks tend to decline cannabis businesses, even non-plant touching and ancillary businesses, because cannabis is seen as very high-risk. Due to cannabis’ Schedule I classification, it is federally illegal and therefore banks will more than likely not want to work with those in the industry – even those operating legally at the state level.
This cashless system also provides additional comfort for people worried about the coronavirus and physician transactions. The software will be available for legally operating cannabis business owners and operators.
The app will be free for consumers and available on the Apple App Store and Google Play Store.