The best cannabis payment processing companies have the expertise in working with cannabis state regulations. However, 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.
So, while most cannabis point-of-sale (POS) systems have their own payment processors, we rounded up a list of truly compliant Note: Our list only considered providers offering payment methods that fully comply with state laws, bank, and card network guidelines. service providers that can scale along 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 for POS flexibility
- Dutchie Payments: Best for customer management
As with most high-risk merchant services providers, cannabis payment processors do not disclose their fees—which is why we did not include fee comparison in our evaluation. However, we scored each provider’s pricing based on other available pricing structures such as POS and hardware inclusions.
Why You Can Trust Us
I applied my 6-plus years of experience evaluating payment systems with my background in finance, POS, and payment technology to these recommendations, prioritizing functionality, affordability, and ease of use. See my full methodology below.
- 6-plus years evaluating payments and POS systems
- Evaluated over a dozen payment systems for cannabis sales
- Regular updates and fact check
Retail Staff Writer at FitSmallBusiness
Cannabis Payment Processing 101
What is a cannabis payment processor? Cannabis payment processors specialize in processing transactions for cannabis retailers, dispensaries, and other “plant-touching” marijuana-related businesses.
While it is legal in Canada, US Federal laws still prohibit the sale of cannabis in the United States. Similarly, accepting credit cards for cannabis sales is considered money laundering and illegal until the Secure and Fair Enforcement (SAFE) Banking Act An act to create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes. is passed.
This is because 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 PIN debits, ACH, and other non-credit card payment types.
In the News:
On May 16, 2024, the Department of Justice (DOJ) began the formal proceedings to reclassify marijuana from a Schedule 1 to a Schedule 3 drug. While this would mean that cannabis will be regarded as “less dangerous,” the reclassification in no way legalizes state-level adult and medical use of marijuana unless it complies with the regulations of the Controlled Substance Act (CSA).
And since the majority of states where cannabis stores operate, though state-regulated, are not CSA- or FDA-compliant, cannabis sales and distribution remain federally illegal. Source: Bloomberg
Risk of Cannabis Credit Card Payment Processing
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 above-board solutions.
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.
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.
More on the legal types of cannabis payment methods in our how to choose section.
Cova Pay: Best Overall Cannabis Payment Processor
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
Overview
Who should use it:
Growing businesses looking for an all-in-one payment and POS solution
Why we like it:
Cova is among the most well-known cannabis point-of-sale (POS) systems in the industry. Besides 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.
Pricing:
- POS system: $349-$549
- Payment processing: Included in POS plan
- Hardware: Included in POS plan
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 next business day (1-3 business days)
Bankcard International Group: Best for PIN Debit Payment Processing
Pros
- Supports true PIN Debit payments directly to merchants and ISOs
- Direct partnership with cannabis-friendly banks
- Can process e-checks and Bitcoin
Cons
- Merchant account approval takes longer (around 4 business days)
- Does not process offline payments
- Pricing not disclosed
Overview
Who should use it:
Merchants looking for a fully compliant PIN debit payment processor
Why we like it:
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 more, Bankcard International Group also works directly with individual businesses and assists with getting approved for a merchant account.
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 e-checks and Bitcoin payments for online purchases.
Pricing:
Bankcard offers custom pricing so interested merchants will need to contact Bankcard for details.
Standout features:
- Accepts ACH payments for online, in-store, and delivery transactions
- Reliable provider of PIN Debit payment methods
- Can reprogram existing payment hardware
- Funds deposited as early as 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 legalized
- Supports subscription-based, online, and in-person cannabis sales
- Offers add-on age-verification software
- Deposits funds as fast as next business day
Blaze Pay: Best for Blaze POS Users
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
Overview
Who should use it:
Merchants using Blaze POS system
Why we like it:
Blaze is among the most popular cannabis POS and dispensary systems in the industry. 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.
Pricing:
BlazePay merchant account is included free with every Blaze POS account.
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
- Supports convenience fee program so merchants can pass on their transaction fees to customers
- Deposits funds between 1-3 business days
Flowhub Pay: Best for Flexibility
Pros
- 1-day onboarding
- Works with other POS systems
- Integrated Mobile POS management app
Cons
- One-time hardware and setup fee
- Ecommerce (with payments) is an add-on
- Not compatible with Android devices
Overview
Who should use it:
Merchants looking for a new or alternative payment processor for their current POS system
Why we like it:
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 online storefronts will benefit with Flowhub Pay.
Pricing:
One-time fee for hardware and setup
Standout features:
- ACH (via Aeropay), online, and mobile payments
- No long-term contract or cancellation fees
- Can be used as a stand-alone or integrated with other POS systems
- 1-day onboarding for standalone users
- Integrates with cannabis banking services
- Integrated with Aeropay for ACH payments
- Includes optional tipping functionality
- Deposits funds as fast as next business day
Tip: Dispensaries are known for holding lots of cash. Invest in a business security system to help keep your employees and business safe.
Dutchie Payments: Best for Customer Management
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
Overview
Who should use it:
Busy storefronts needing advanced CRM tools for faster and efficient checkout
Why we like it:
Dutchie offers a full seed-to-sale compliant cannabis POS system with a built-in payment 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 with some of the most frictionless payment methods available. However, like any ACH payment, funding takes anywhere from 1-3 business days. And while payments are seamlessly integrated with Dutchie ecommerce, some online functionalities may require integrations.
Pricing:
Payment processing included in monthly POS fee, requires a long-term contract
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
- Omnichannel payments
- Deposits funds between 1-3 business days
How to Choose a Cannabis Payment Processor
Below, we provide you with a step-by-step guide for picking the right cannabis payment processor for your business type:
Step 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.
Step 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 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, for which card networks and financial institutions (both under federal jurisdiction) assume the risk.
Legal payment methods for cannabis payments:
- In-store: PIN debit, gift cards
- Online: ACH/e-checks, gift cards
- Mobile: POS terminal, customer mobile app (all using ACH)
Step 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):
Pro Tip: Check the proposed merchant account contract (and fees) to make sure that your preferred payment method is directly integrated with the payment processor so you don’t have to pay additional fees for third-party integrations.
Step 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 with a built-in payment processor, ensure no additional monthly fees are required to use the service.
- Most providers already include payment processing services in the monthly account fees but may require additional costs (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% 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
Frequently Asked Questions (FAQs)
These are a few of the most common questions we get about cannabis payment processors.
Cannabis PIN Debit processing is a payment method where customers use their debit cards to pay for cannabis purchases and authenticate the transaction by 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.
