I had the opportunity to sit down with Ian Rassman, the Deputy Director of LA NORML, Merchant Specialist at Chosen Payments, and a close member of the WebJoint family. In this interview, we talk about Ian’s experiences in the cannabis industry and where he thinks the future of cannabis payments will end up.
Q: What can you tell us about the origins of your interest in/experience with cannabis?
Q: You’re involved with a lot of different things within the cannabis industry. Can you share with our readers what organizations you’re affiliated with and what you do?
Q: What problem does Chosen Payments solve for the cannabis industry?Ian: Retail cannabis merchants and cannabis delivery services have mostly operated in cash. Issues of storing, transporting, depositing, auditing, theft and safety are all amplified for CRBs operating heavily in cash. Chosen Payments provides Point Of Banking (POB) services to retailers and delivery services allowing them to accept safe, secure, auditable and compliant digital cannabis payments from their customers while also increasing the average ticket price per sale. Chosen Payments helps minimize cash and increase digital cannabis payments that fund directly to your bank account. For cannabis delivery services Chosen Payments provides 4G mobile terminals for secure, compliant digital cannabis payments.
Q: Cannabis delivery services are subject to robberies and other hazards on the field. How can digital payments make deliveries safer?Ian: The new normal brings health and safety concerns to both customers and drivers alike. First and foremost, on everyone’s minds these days is the current COVID-19 pandemic. No one wants to touch cash anymore, so digital payments via a Cashless ATM with limited contact is a much safer alternative for everyone. Eliminating the cash also makes drivers less of a target for robberies. Mobile terminals providing digital payments can enable safe home delivery and curbside pickup. Cannabis payment processors have always been a shaky part of the cannabis industry. There are horror stories of accounts getting shut down and assets being frozen. How has Chosen Payments ensured the safety of their retail accounts? Well, if your bank throws you out for being a cannabis business, your merchant services account dies along with it. However, there was a time when some CRBs and processors, to get around restrictions put in place by the Card Brands (Visa/MC/Amex, etc.), would mis-represent who the merchant was by coding the dispensary as a “pharmacy” or a “florist.” Eventually it would become clear that there were no aspirins or roses being sold and that account would be shut down. Misrepresentation was a common contractual reason for closing a merchant services account. It should have been the responsibility of the processor to lead their customer down the road to compliant solutions, rather than the many work-arounds (crypto, blockchain, stored value, etc.) that exist to undermine the Card Brand policy of not accepting credit cards for cannabis. No matter how much everyone wants it, there are simply no air-miles for your cannabis purchases. Transparency is critical in this process. For our cannabis clients at Chosen Payments, we only utilize Point Of Banking (POB) where all transactions are PIN-based and through your ATM card. Our solution utilizes the ATM rails. In the simplest possible terms, a payment rail is any form of digital infrastructure that transfers money from one individual or business to another. These are a completely different set of payment rails than the ones owned and operated by the Card Brands. At this time, there is no Visa/MC/Amex for cannabis.
Q: Can you give us a quick breakdown on the difference between ACH transactions and the cashless terminals Chosen Payments uses?Ian: ACH payments are electronic payments that go through the Automated Clearing House (ACH) Network. Funds move from one bank account to another with the help of a centralized system that directs funds to their final destination. Most people are already familiar with ACH payments either from Direct Deposit from their employer or when they pay bills electronically from their checking account. Customers need to know their bank Routing and Account numbers to transmit funds. The cashless ATM (point of banking) terminal supports PIN-based card transactions: ATM/debit cards. When the customer inserts their debit card, a digital transfer is initiated. This gives your customers the ability to pay with their cards at the point of sale, increasing customer throughput and average ticket price. The secure countertop and 4G mobile terminals that we use are easily updated with the latest software, and on the first day that the card brands allow for it, we will patch the terminals to accept those cards. Customers must have their card present and know their ATM PIN number to transmit funds.
Q: What are the benefits cannabis retailers can experience by using digital payments? Do customers spend more?Ian: Yes. Retailers typically experience increased average ticket price as compared to cash payments. Other benefits include:
- Eliminating the liability of having cash at the counter.
- Safe, Secure and Compliant.
- No processing fees to your business.
- Quick and easy approval process with only a cannabis license, a driver’s license, and a voided check.