When it comes to processing payments for your cannabis business, it can be tempting to go with a large corporate payment processor brand. After all, these brands are well-established and have a reputation for being reliable. But before you make a decision, it's important to consider some potential downsides of choosing a big, multi-national credit card processor.
In this blog, we'll explore the experience merchants may get when working with a large corporate payment processor brand and weigh the pros and cons. From hidden fees to inflexible negotiations, we'll dive into the challenges that merchants face when selecting a payment processor partner.
Potential Limitations of Large Corporate Payment Processors
Going with a large corporate brand may seem like the safe and secure option. But what many business owners don't realize is that there are several potential limitations that come with working with huge corporations.
Let’s take a closer look, and why it's important to consider alternatives that may better meet your business needs in the long run.
1. Cannabis Biases from Large Payment Processing Companies Unfortunately Exist
First and foremost, it's important to understand that large corporate payment processor brands often have strict guidelines and policies in place that can make it difficult for cannabis businesses to leverage their services.
This is because cannabis is still considered a Schedule I substance by the federal government in the United States, and even within Canada there are stringent regulations cannabis business owners face. In other words, it means banks and other financial institutions can be hesitant to work with businesses that operate in this industry.
As a result, many large corporate payment processor brands have implemented strict rules and regulations that cannabis businesses must abide by in order to use their services. If your payment processor isn’t proud to represent your brand and product, it may be time to reconsider if they’re the right fit for your cannabis business.
2. Large Payment Processors Have Potentially Higher Fees
One of the biggest downsides of working with a large corporate payment processor brand is the high fees that are often associated with their services. Big brands come with higher overhead costs associated with operating a global payment processing network.
In addition to overhead costs, large payment processors invest heavily in marketing and advertising, and legal and compliance efforts. These investments add to the cost structure of the company, which are ultimately recovered through higher fees charged to their customers.
In contrast, specialized niche payment processors are focused on serving a specific market or industry, and have lower overhead costs and fewer investment requirements. This allows them to offer faster boarding times, more competitive fees and better value to their clients.
3. Big Brands Are Inflexible to Negotiate Rates
Another potential downside of working with a large corporate payment processor brand is the lack of flexibility that these brands often offer. Large corporations are typically focused on a one-size-fits-all approach, which means that they may not be able to accommodate the unique needs of your cannabis business.
For example, if you need to integrate your payment processing with other cannabis software systems, a large corporate payment processor brand will most likely not be able to accommodate these needs, or work with you to find a solution.
Specialized payment processors have a deeper understanding of the specific needs and challenges of their target market, are integrated with all cannabis software solutions which allows them to provide more tailored and effective payment processing solutions.
Why Choosing a Payment Processor In A Highly Regulated Market Matters
In contrast, smaller, independent payment processors are more flexible and willing to work with businesses in the cannabis industry. Niche payment processors understand the unique challenges that cannabis business owners face, and are more willing to work with you to find a solution that meets your needs. Specialized cannabis payment processors on the other hand, are more willing to negotiate fees and other terms with their clients.
Large corporate payment processors are less likely to offer the level of customer support and industry knowledge that cannabis merchants need. Whereas independent payment processors often prioritize customer support and provide a more personalized experience. This can make a huge difference when it comes to troubleshooting and resolving issues if and when they arise.
Choose Partnerships That Stand The Test of Time
While it may be tempting to go with a large corporate payment processor brand, there are some things to consider that come along with it. Increased fees, strict guidelines and policies, lack of flexibility, and lack of customer support are a few potential downsides of working with a giant corporate payment processor brand.
By choosing an independent payment processor, you'll have more flexibility, lower fees, and better customer support. Additionally, you'll be in a better position to adapt to changes in the industry as it continues to grow and evolve.
How Merrco Can Help
For cannabis merchants, choosing a payment processing company that understands the unique challenges and considerations of the cannabis industry is critical.
Merrco is a Canadian cannabis payment processing company that operates in a highly regulated industry, and offers merchants safe and secure payment processing products and services. We help merchants navigate the complexities of the cannabis payment processing industry and choose the right solution for their business.
If you have any questions on how we can best help you, don't hesitate to contact us at info@merrco.com or call our toll-free number at 1-800-957-0534.