January 30, 2023

What Are the Most Secure Forms of Payment for California Dispensaries?

Lilly Raney
January 30, 2023

In 2022, there were more reports of robberies, burglaries, assault with a deadly weapon, and other crimes at Los Angeles dispensaries than during any other stretch since cannabis became available for retail sale in 2016. In February of the same year, there were 14 reported crimesβ€”the highest ever since 2018. January had 10 crimes, while November and December had eight each. In previous years, the average monthly number of crimes never reached five.

Implementing a secure cashless payment solution will help ensure your state-legal, legitimate dispensary operates like any other type of business, while making it a less appealing target for theft. But with cashless ATM no longer being a viable option for retailers, it begs the question: which payment options are the safest and most legit for dispensary operators?

The answer is PIN debit and ACH banking. Let's explore each of these more in-depth below.

1. PIN debit

A Personal Identification Number (PIN) debit transaction is an electronic funds transfer from a customer’s bank account to the dispensary’s bank account. PIN debit transactions are initiated when a customer inserts their debit card into a card reader and then enters a four digit PIN to verify authorization of the sale.

Are PIN debit transactions safe for dispensaries?

Yes! PIN debit transactions are extremely popular in traditional retail environments (think gas stations, clothing stores, grocery stores, etc.) and considered one of the most secure forms of card payment. This is because:

  • The customer’s card is presented at the terminal
  • A PIN is required to validate the purchase
  • The funds are immediately removed from the customer’s bank account

For example, Dutchie’s fully-integrated PIN debit solution allows dispensaries to accept in-store debit card purchases from customers. Unlike the now defunct Cashless ATM, PIN debit transactions are for exact dollar amounts, which means no rounding up. Reduced dependence on cash means less likelihood of costly human errorβ€”and eliminates the potential for confusion during the checkout process.

Ready to learn more about Dutchie’s integrated PIN debit solution? Contact us today and we’ll get you up and running in no time.

2. ACH banking

Another popular and safe cannabis payment option is to facilitate transfers through ACH (Automated Clearing House).

An ACH payment is a type of electronic bank-to-bank payment. The Automated Clearing House is a U.S. financial network that enables the transfer of money between bank accounts, rather than going through card networks or using wire transfers, paper checks, or cash. The network is governed by NACHA (National Automated Clearing House Association), which regulates payments as they're processed in daily batches.

This digital payment process refers to the process of transferring money between banks without checks, wire transfers, or cards.

Are ACH payments safe for cannabis?

You bet. The ACH network is highly regulated, meaning there are fraud protections and security infrastructure in place to protect both customers and businesses from any vulnerabilities.

Dispensaries can enable ACH payments today with Dutchie Pay, our fully-integrated digital payment solution. Dutchie Pay is available both online and in-store, enabling you to provide your customers with the same familiar mobile checkout experience they’re accustomed to in traditional retail environments. Shoppers can also choose how they payβ€”with curbside and delivery options included.

Ready to future-proof your dispensary with digital payments from Dutchie Pay? Contact us now to learn more.

The bottom line

As industry-wide instability persists, you’ll likely hear potentially unsubstantiated claims from payment providers regarding alternative payment products. We encourage you to carefully research dispensary technology providers, as selecting a cannabis payments partner is a critical business decision that can impact your operations in California for years to come.

Dutchie is here to support California dispensaries with our industry-leading POS, Ecommerce, and Payments solutions. Our integrated PIN debit solution, in conjunction with Dutchie Pay's successful launch of in-store payments, allows us to streamline your business operations with payment solutions you needβ€”and your customers love.

Ready to grow together? Contact us today to get started.

About the author
Lilly Raney
Regional Sales Director, West