Securing a payment processor that is compliant and also customer-friendly is one of the most challenging aspects of operating a cannabis or dispensary business.
Best Cannabis Payment Processing Companies in 2023
This article is part of a larger series on Payments.
Cannabis payment processors specialize in processing transactions for cannabis retailers, dispensaries, and other “plant-touching” marijuana-related businesses.
To find the best cannabis payment processing companies, we narrowed in on “truly compliant” payment methods that can scale with your business without breaking the bank.
The best cannabis payment processors are:
- Cova Pay: Best overall cannabis payment processor
- Bankcard International Group: Best for PIN Debit payment processing
- Blaze Pay: Best payment processor for Blaze POS users
- Flowhub Pay: Best cannabis payments for storefronts
- Dutchie Payments: Best for customer-facing mobile payments
Note: Our list only considered providers that offer payment methods that fully comply with state laws, bank, and card network guidelines.
Top Cannabis Payment Processors Compared
Monthly & Hardware Fees | Storefront Payments | Online Payments | Mobile Payments | POS Integration | Deposit Speed | |
|---|---|---|---|---|---|---|
 | Included in POS fee + hardware | PIN Debit ACH | ACH gift card | POS terminal | Exclusive/ built-in | 1-3 business days |
 | Not disclosed | PIN Debit ACH | ACH echeck | POS terminal | Multiple POS | Next business day |
 | Included in POS fee + hardware | PIN Debit cashless ATM* | ACH | POS terminal | Built-in & multiple POS | Next business day |
 | $0 monthly + one-time hardware fee | PIN Debit ACH | ACH | POS terminal | Built-in & multiple POS | Next business day |
 | Included in POS fee + hardware | PIN Debit ACH | ACH | POS terminal, customer mobile app | Exclusive/ built-in | 1-3 business days |
*Available although not recommended, which we discuss in our How to Choose section below.
Most cannabis point-of-sale (POS) systems that already have expertise in working with cannabis state regulations have their own payment processing services.
Risks of Cannabis Credit Card Processing
To put it plainly, unless the federal law legalizes cannabis or the Secure and Fair Enforcement (SAFE) Banking Act is passed, accepting credit cards for cannabis sales is considered money laundering and illegal.
This is because interchange, card networks, and financial institutions that are involved in processing credit card transactions follow federal laws and guidelines. So, all of our recommended solutions accept debit, ACH, and other non-credit card payment types.
You may be tempted (as some already have) to work with payment processors offering “fully compliant” cannabis credit card processing. In truth, these providers are offering “workarounds” that hide the actual transaction information. Other cannabis businesses find workarounds via parent companies with merchant accounts from local credit unions.
If you are audited while using a workaround, you may be subject to frozen funds, closed accounts, and potentially even prosecution.
We recognize that many operating dispensaries and cannabis retailers process credit card payments through these and other kinds of workarounds, but we are only recommending aboveboard solutions.
Cova Pay: Best Overall Cannabis Payment Processor
Overall Score:
4.14 / 5
Pros
- Has an offline mode
- Known for its reliable reporting and tracking compliance
- 24/7 live chat and phone support
Cons
- Payment processor exclusive to Cova
- Add-on fees to access ecommerce features
- Only compatible with Android
What We Like
Cova is among the most well-known cannabis point-of-sale (POS) systems in the industry. Aside from being compatible with other payment services, Cova also has its own payment processing service. Cova Pay is included in the monthly POS subscription fees, so there is no extra cost to use this cashless payment service. The system accepts PIN Debit and ACH payments in-store and via mobile for curbside and cash-on-delivery.
Transparent pricing, 24/7 customer support, and next-business-day deposits gave Cova Pay the top spot in our rankings. However, unless you sign up for a custom plan, you may need to pay extra to accept orders and payments online.
Cova Pay Standout Features
- Accept (NFC) digital wallet payments
- ACH payments from QR code (for in-store) and payment page (online)
- Can process payments while offline
- Fully integrated to POS so it keeps close track of daily transactions
- Allows merchants to create digital and physical branded gift cards
- Deposits funds as fast as the next business day (one to three business days)
Bankcard International Group: Best for PIN Debit Payment Processing
Overall Score:
4.09 / 5
Pros
- Supports true PIN Debit payments directly to merchants and ISOs
- Direct partnership with cannabis-friendly banks
- Can process echecks and Bitcoin
Cons
- Merchant account approval takes longer (around 4 business days)
- Does not process offline payments
- Pricing not disclosed
What We Like
Bankcard International Group, also known as B.I.G., is recognized as one of the industry leaders in cannabis payment processing—and it’s hard to argue. In fact, most of the other providers in our list that accept true PIN Debit payments, including Cova Pay, are powered by Bankcard. What’s best is that Bankcard International Group also works directly with individual businesses and assists with getting approved for a merchant account.
True PIN Debit payments are transactions using regular debit cards to pay for cannabis purchases—transactions are authenticated through customers entering their PIN on a PIN pad, much like customers would do in a supermarket. This ensures that customers are charged the exact amount with no additional charges, and full disclosure of the transaction is provided to the banks.
If you’re looking for cashless ATMs and gift card payments, you won’t find them here. However, Bankcard International Group supports alternatives like mobile ACH payments for in-store transactions, as well as echecks and Bitcoin payments for online purchases.
Bankcard International Group Standout Features
- Accepts ACH payments for online, in-store, and delivery transactions
- Reliable provider of PIN Debit payment methods
- Accepts payment hardware reprogramming
- Funds deposited as early as the next business day
- Works with both independent sales organizations (ISOs) and individual cannabis businesses
- Provides fully compliant cannabis merchant account
- “First-in-line” to credit card processing implementation once available
Blaze Pay: Best for Blaze POS Users
Overall Score:
4.07 / 5
Pros
- Includes mobile 5G debit terminals
- Can integrate with multiple cannabis banking services
- Runs on iOS and Android systems
Cons
- Exclusive to Blaze POS users
- Undisclosed pricing
- Likely expensive monthly subscription
What We Like
Blaze is among the most popular cannabis POS and dispensary systems in the industry. Launching its own built-in payment processing service, Blaze Pay seems to be a natural next step. After key acquisitions in the past year, Blaze now serves 11 new markets and over 1,500 cannabis businesses in North America. With Blaze Pay, users can accept PIN Debit and ACH payments for in-store, online, and delivery transactions. The mobile POS terminal can process NFC payment methods like digital wallet payments and QR codes.
While Blaze currently does not disclose its pricing, a Blaze account includes Blaze Pay in the subscription. And unlike Cova, Blaze’s ecommerce features (including the payment service) are not an add-on. The system also accepts cashless ATMs—although we don’t recommend this type of payment method.
Blaze Pay Standout Features
- ACH payment method for in-store and online purchases
- Provides customers the option to pay via SMS
- Includes a mobile 5G payment terminal for curbside payments
- Supports 1-time customer account setup
- Integrates with cannabis banking services
- Optional tipping functionality
- 48-hour reconciliation reporting
Flowhub Pay: Best for Accepting In-store Payments
Overall Score:
4.03 / 5
Pros
- 1-day onboarding
- Customer-facing app w/ advanced ordering and payment processing
- Compatible with iOS devices
Cons
- One-time hardware and setup fee
- Ecommerce is an add-on
- Not compatible with Android devices
What We Like
Flowhub Pay is Flowhub’s proprietary payment processing service. But unlike Cova and Blaze, Flowhub Pay can work as a standalone processor and integrated with other cannabis POS systems. It allows merchants to accept debit card and ACH payments through its partnership with Aeropay. What’s best is that there are no long-term contracts or cancellation fees, and setup is fast even for standalone Flowhub Pay users.
Flowhub comes with a customer-facing mobile app, Greet, to support CRM with ID verification and purchase history. However, unlike Dutchie Pay (which we will discuss later in this guide), Greet does not come with mobile ACH payment functionality. Ecommerce is also an add-on feature so merchants with storefronts will benefit more with Flowhub Pay.
Flowhub Pay Standout Features
- ACH online and mobile payments
- No long-term contract or cancellation fees
- Can be used as a stand-alone or integrated with other POS systems
- One-day onboarding for stand-alone users
- Integrates with cannabis banking services
- Integrated with Aeropay for ACH payments
- Includes optional tipping functionality
Tip: Dispensaries are known for holding lots of cash. Invest in a business security system to help keep your employees and business safe.
Dutchie: Best for Customer-facing Mobile Payments
Overall Score:
3.96 / 5
Pros
- Customer sales and CRM app
- Streamlined return process
- Proprietary payment terminal
Cons
- Can be expensive
- Some ecommerce tools are an add-on
- Limited integrations
What We Like
Dutchie offers a full seed-to-sale compliant cannabis POS system with a built-in payments processing service. In-store payments are made through PIN Debits while ecommerce transactions are processed with ACH payments.
However, what made Dutchie stand out is its mobile payments feature, which not only includes a mobile POS terminal for curbside transactions, but also a customer-facing mobile app. Dutchie Pay, a free Dutchie app where customers can send their orders in advance, is also equipped with an ACH method to remotely complete payments.
Dutchie Pay is also available to use at storefronts, so customers are provided some of the most frictionless payment methods available. However, like any ACH payment, funding takes anywhere from one to three business days. And while payments are seamlessly integrated with Dutchie ecommerce, some online functionalities may require integrations.
Dutchie Standout Features
- ACH payments for in-store and online purchases
- PIN Debit and mobile payments for in-store transactions
- Dutchie Pay customer app for CRM, in-app ordering, and payments
- One-click payments
- Proprietary mobile POS terminal
- Streamlined return process
How to Choose a Cannabis Payment Processor
1. Check for compliance: Like cannabis POS systems, compliance should be at the core when choosing a cannabis payment processing company. And by compliance, we mean the transaction process is built in such a way that there is full transparency in every step and institution involved.
Look for the following signs to identify secure payments for dispensaries and cannabis retail:
- The transaction receipt includes complete information such as the merchant’s name and contact information, transaction date, final amount charged to the card, and the last four of the card charged for the transaction.
- The amount paid is the exact amount of the transaction, not rounded to a certain amount.
- Convenience fees (if any) are properly disclosed (fixed amount or up to 4%).
- The merchant’s trade name or legal name is properly disclosed in the customer’s bank statement.
- The MCC code 5912 (for cannabis) is clearly stated in the merchant’s bank statement.
2. Only sign up for legal payment methods. Cannabis sales are restricted to transactions that (1) offer a clear trail of funds and purchase, and (2) are made in some form of cash or other instruments. This means the funds that are being used to complete the transactions are readily available and not from a line of credit.
Without going into the technicalities, this is why debit cards are acceptable to use for cannabis sales transactions while credit cards are not—even if the debit cards carry card network brands.
Payments coming from a customer’s debit card are funded straight from the customer’s available cash in the bank. Meanwhile, payments from credit cards are funded from a line of credit which card networks and financial institutions (both under federal jurisdiction) assume the risk.
Legal cannabis payment methods:
- In-Store: PIN Debit, Gift Cards
- Online: ACH/echecks, Gift Cards
- Mobile: POS terminal, Customer mobile app (all using ACH)
What about cashless ATMs? We don’t recommend using cashless ATMS even if it uses the customer’s available funds, because it lacks transparency. It is set up so that transactions appear like ATM cash withdrawals to hide the true use of the funds. Cashless ATMs also force the customers to issue rounded payments in $5 and $10 increments as the transaction is masked as a cash withdrawal.
3. Look for cannabis-specific card banking services. Every payment processor that works with “plant-touching” cannabis merchants should have a state-compliant banking service. These are credit unions that accept the risk of processing transactions in the industry. Some credit unions work directly with payment processors, while others join online marketplaces that work as a third-party integration.
Examples of State-compliant financial institutions that work with marijuana-related businesses (MRBs):
Credut Unions | Credit Union Marketplaces |
|---|---|
|
|
Pro tip: Check the proposed merchant account contract (with fees) to make sure that your preferred payment method is directly integrated with the payment processor so you no longer have to pay additional fees for third-party integrations.
4. Consider the fees. Because cannabis payment methods do not include credit cards, merchants do not have to worry about transaction fees (including chargebacks). However, there are other costs involved.
Consider the following:
- If you sign up with a POS system that comes with a built-in payment processor, make sure that there are no additional monthly fees to use the service.
- Most providers already include payment processing service in the monthly account fees, but may require some sort of additional cost (either a subscription upgrade or third-party integrations for banking services) to access some payment methods.
- ACH transactions come with their own processing fees and reject fees (similar to chargeback for credit cards), so make sure to know how much the providers charge for this.
- Most providers will allow merchants to charge convenience fees for non-cash transactions. Make sure you are aware of the pros and cons.
- Ask about the hardware. Some payment processors already include payment terminals in their monthly subscription cost (as a rental) but others may require you to purchase these devices outright.
How We Evaluated Cannabis Payment Processing Companies
We compared a dozen cannabis payment processors and evaluated them based on pricing, payment types, ease of use, and expert score. Compliance and transparency played a significant role in applying weights to each criterion. We also asked our retail experts to give their personal knowledge of each software.
We have also spoken with several dispensaries to learn more about how they handle payment processing.
Cova Pay emerged as the best cannabis payment processing provider in our evaluation, with a score of 4.14 out of 5 for its compliant payment methods and transparent pricing. Other cannabis payment processors also made our list for their standout functionalities.
Click through the tabs below for a more detailed breakdown of our evaluation criteria:
20%
Pricing
30%
Payment Types
25%
Ease of Use
25%
Expert Score
20% of Overall Score
We took into consideration the monthly fees and hardware fees, as well as contract terms and cost for early cancellations. Dutchie earned the highest score of 4.25 out of 5 followed by Flowhub Pay.
30% of Overall Score
For this category, we evaluated each provider based on their available legal payment methods and whether or not it requires additional fees. Some providers that have their ecommerce features as an add-on or an upgrade lost points in this section. Blaze Pay and Bankcard International both earned perfect scores.
25% of Overall Score
We expanded this category to include approval, setup, migration, customer service hours, deposit speed, and available integrations. We also looked at each provider’s card banking services options to determine the level of assurance that merchants are not in danger of business interruption. Cova Pay and Bankcard International led with a score of 4 out of 5.
25% of Overall Score
Last but not least, we looked at each provider’s features and evaluated these in terms of transparency and value for money. We also took into consideration the actual merchant user’s opinion about the service as well as the product’s scalability with integrations. Flowhub Pay, Cova Pay, and Blaze Pay all scored 4.69 out of 5.
*Percentages of overall score
Cannabis Payment Processing Frequently Asked Questions (FAQs)
Cannabis PIN Debit processing is a payment method where customers use their debit cards to pay for the cannabis purchases and authenticate the transaction by means of entering their PIN on a PIN pad. Much like when using debit cards at supermarkets.
Aeropay and CanPay are both debit payment apps that allow cannabis customers to pay in-store and online payments through ACH. The difference between the two is in the fees. Aeropay charges merchants 2.5% + 25 cents per transaction, while CanPay charges less than 2% per transaction.
Certain state-compliant credit unions offer financing services to cannabis companies. The best way to find them is to check out marketplaces for cannabis banking services.
Cannabis point of banking, also called cashless ATM, is the method of paying for cannabis purchases by using an “ATM-like” terminal that’s connected to the checkout register. Their withdrawn amount is sent directly to the merchant without a physical exchange of cash. However, this type of payment method is not encouraged as it lacks the necessary transparency required from cannabis businesses.
Bottom Line
Setting up a legit payment processing service is crucial for cannabis business owners to succeed. Look for options that are designed to fully comply with state and federal regulations instead of looking for workarounds for fast cash. Consider our list of cannabis payment processing companies for the best alternatives in scalable, value-for-money, versatile, and, most of all, truly compliant payment methods.
