As the cannabis industry continues to evolve, retail owners need to keep up and ensure their business is equipped with tools that help them compete in a highly regulated industry. Cannabis retailers are all too familiar with the challenges that come with sending and receiving payments. So it’s essential that you are on the lookout for innovative ways to make payments easy for vendors, clients, and customers.
One of the easiest ways to modernize your business operations is to utilize Electronic Fund Transfers (EFTs). EFT payments are becoming increasingly popular among cannabis merchants and vendors, and for good reason.
What Is EFT?
Electronic Fund Transfer is an immediate payment made electronically between two banks, or from one bank account to another. They include direct debits, direct deposits, mobile payments and online payments.
Let’s take a closer look at the top 3 outdated payment methods your business should consider replacing, and the top 4 reasons cannabis merchants should move to EFT payments.
The Top 3 Outdated Payment Methods
Today, we can do almost everything online. So it's no surprise that cannabis merchants are looking for ways to streamline their payment methods.
While electronic payments are becoming more and more commonplace, there are still a few payment methods that business owners are still hanging on to. Here are three of the most common:
Cheques: Cheques were once a business staple. But they are now one of the slowest and most insecure payment methods available. They can take days to process and are easy to forge. As a result, many businesses are no longer accepting cheques as payment. Banks have also been moving away from this method.
Wire Transfers: Wire transfers are increasingly being replaced by alternative methods, this includes EFT payments. There are several reasons for this shift. Fees associated with wire transfers can be quite high, the process of sending a wire transfer can be complicated and time-consuming, and there is a growing preference for more convenient and user-friendly digital payment methods.
Credit Cards: Paying with credit cards can be quite difficult as cannabis retailer credit card applications are often being denied by issuing banking institutions as they perceived the cannabis industry as a high-risk vertical. Credit card payments are also more difficult to reconcile, carry annual fees, and are not widely accepted as B2B payments.
Top 4 Reasons Why Cannabis Merchants Should Utilize EFT Payments
There are several reasons why you should start using EFT payments, including the following:
1. Quick Access To Funds
EFT payments are the fastest way to pay your vendors.
With an EFT payment, you can have your funds deposited directly into your bank account, typically within one to two business days. This can be a great option if you need access to your funds quickly and don't want to wait for a cheque to clear. Additionally, EFT payments are a quick and efficient way to pay your vendors.
2. EFT Payments Do Not Require A Debit or Credit Card
EFT payments are cheaper than paying through credit cards.
Electronic funds transfer (EFT) payments are bank to bank transactions. EFT payments do not require a debit or credit card. Instead, the payment is made directly from your bank account to the payee's bank account. This type of payment is becoming increasingly popular because it is faster and typically has lower fees than credit cards.
3. EFT Payments Are Safe And Secure
EFT payments are a safe and secure way to pay vendors.
The 2021 AFP Payments Fraud and Control Survey found that cheques and wire transfers are the payment methods that are most likely to be involved in fraudulent transactions. Paper Cheques clearly display your bank information, making them a huge security risk.
EFT payments, however, are safe and secure. Your information is encrypted and transmitted securely to your vendor’s bank. The payment is then processed through the bank's security measures. EFT payments are also backed by the bank's fraud protection, so you can feel confident that your payment is protected.
4. EFT Payments Reduce Operating Expenses
EFT payments help you improve cash flow and save time.
As a cannabis merchant, you can benefit from using EFT payments to pay your suppliers, employees and vendors. By reducing the need for paper cheques, EFT payments can help save on operating expenses. In addition, EFT payments are typically processed faster than cheques, which can help businesses improve their cash flow and save time.
Final Thoughts
If you haven’t already, cannabis merchants should strongly consider utilizing EFT payments as they offer several advantages over traditional payments. Quick access to funds, the elimination of waiting for cheques to clear, and increased security are just some of the reasons why EFT payments should be part of your payment toolkit. EFT payments can help your business reduce expenses, mitigate chargebacks and fraud, and accelerate your receivables process.
How Can Merrco Help?
Merrco offers payment processing solutions to cannabis, CBD and regulated businesses in Canada and the US. Contact us at info@merrco.com or call us at 1-800-957-0534 to learn more about how we can help your business process payments quickly and securely.