Centri Business Consulting Moderates A Discussion On Payment Processing Dangers & Solutions In The Cannabis Space

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Navigating banking and financing in the cannabis industry has been a long-time challenge. There are risks associated with banking in the cannabis space which has contributed to the current setbacks in regards to payment processing.

Managing Partner of Centri Business Consulting Michael M. Aiello moderated a panel of financial experts in the cannabis space where they discussed topics such as legal payment processing and fraud.

Centri Business Consulting is an expert financial advisory firm that provides accounting advisory services to the cannabis industry.

Payment Processing Concerns

Aiello asked the Chief Revenue Officer of Hypur, Inc. Tyler Beuerlein what his perspective was on payment processing in the cannabis space and doing it the legal and right way.

“We’ve seen every iteration of a payment product come out over the last six-and-a-half years. We jokingly refer to it as whack-a-mole in this building,” said Beuerlein.

Beuerlein went on to discuss the desire of many merchants for congress to pass the SAFE Act which would allow them to start running credit cards.

“What they don’t realize is that the branded card networks are not coming into the cannabis industry until federal legality, period,” he said. “The SAFE Act does not change that.”

If it involves a branded card somebody has misrepresented the nature of the business on the application and that’s fraud, unequivocally, he continued.

One of Beuerlein’s biggest concerns is the use of reverse ATMs and cashless ATM models that have been implemented by many in the industry. “People don’t yet realize that those are not permissible and fraudulent.”

He then went on to caution those in the industry to get in touch with people that understand the payments landscape and the banking landscape in this space before making a decision with payments.

The Solution

As concerns around money laundering, questionable workarounds and fraud were brought into the conversation, Aeillo extended the question of how payment processing can be done without these questionable actions.

“As it stands today, the only truly permissible means of transaction is a direct bank-to-bank transfer model,” said Beuerlein. “To do that, the banker credit union that originates those transactions needs to have built out the regulatory compliance capabilities to bank the industry in general. 

Beuerlein emphasizes that a third party can not be involved in the transaction process, otherwise, it will be problematic.

“I would hope at this point people would learn their lesson and find solutions that are truly permissible and sustainable in the space.”

Photo by Jan Antonin Kolar on Unsplash

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.