Introduction to Opportunities, Challenges, and Expectations
After almost a century, the prohibition on the sale of recreational marijuana was lifted in Canada. Since October 17, 2018, the payments ecosystem shifted due to the return of this player. The production is regulated on the federal level, while the provincial government must decide on how cannabis is distributed among the population.
The different rules and policies set in place have both created opportunities and challenges for the nation’s FinTech industry. For instance, the FinTech industry can create payment models that are compliant with the new policies. On the flip side, banking partners that support cannabis payments may also be challenged, especially in the case of cannabis companies that have their headquarters located outside of Canada.
Nonetheless, cannabis companies and businesses within the FinTech industry have collaborated in order to innovate new and improved payment processing solutions. Businesses and their customers want transactions to be both fast and secure, no matter what medium they are done through. Ideal mobile phone transactions should be processed quickly without hassle in addition to transactions made through a desktop computer.
It should be emphasized that while creating efficient payment solutions, be it by virtue of speed or automation, it is integral that all parties involved comply with federal and provincial regulations. This ensures that fines are avoided, which ultimately benefits the bottom line.
Building the Framework for Efficiency and Innovation
Canadian businesses may look to the U.S. when it comes to building the framework of payment solutions.
Payment platforms in the U.S. offer a variety of services for merchants, which can involve invoicing and deposits using the Automated Clearing House (ACH). ACH is a digital system in which funds can be transferred by individuals. Run by the National Automated Clearing House Association (NACHA), one of the system’s most recent innovations is the ability to allow for same-day clearance when it comes to debit and credit transactions.
As for Canada itself, Electronic Fund Transfers (EFT) is becoming a common payment solution for cannabis. Businesses that are familiar with the EFT ecosystem have an advantage when it comes to creating and choosing the most suitable payment processors.
Another way to increase efficiency when it comes to payments and cannabis is through adapting to ISO 20022. ISO 20022 is a global standard designed for the sake of simplifying communication among businesses. Efficiency comes with this simplification, as the global standard allows businesses to get used to the involved language and syntax.
There are a variety of reasons for the implementation of ISO 20022 in Canada. Although the nation has had a payments infrastructure that lasted and worked well for decades, the emergence of innovative technology in the digital realm has changed the game. In order to make the most out of this new technology and the increasing tendency of consumers to complete digital transactions, the launch of ISO 20022 was necessary.
With the proliferation of digital technology, the modernization of businesses come into play and stakeholders who are a part of the cannabis industry are no exception to this. In addition to the reasoning behind the implementation of ISO 20022, there are several benefits that should be taken into account when getting involved with the industry.
ISO 20022 helps to support automated processing, as well as to give involved parties remittance information. This type of information comes in the form of invoices that can be sent to stakeholders using a single digital payment. As a result, the need for manual work such as reentering data has decreased, which allows for stakeholders to increase business efficiency.
Another benefit of ISO 20022 is the ability to consolidate payment standards to one global standard. This consolidation not only improves the efficiency of businesses, but also contributes to innovation. Third parties that provide services, and merchants who use payment systems, are then able to find better ways to bring about payment and remittance information using a single message.
There is also the added benefit of paperless transactions. With ISO 20022, businesses are able to utilize eye-catching digital payment options to decrease the confusion that comes to multiple inconsistent formats, as well as save on costs and help with waste reduction. With the digitalization of transactions, businesses no longer have to print multiple drafts with every minor reitateration.
Since numerous businesses across the globe are adapting to ISO 20022, it makes sense that Canadian businesses join in for the sake of better business practices and the benefits by virtue of efficient cross-border payments.
The State of Cannabis Payment Processor Solutions
As the Canadian cannabis industry continues to grow, the expectation from consumers to experience maximum efficiency when it comes to the transaction process is also at the forefront of business owners’ minds.
In order to meet these expectations, remain competitive, and ultimately benefit the bottom line, business owners are working with payment processors and involved industry stakeholders including Merchant Broker. By seeking out advantageous partnerships within the industry, business owners would then be able to get the best and most suitable processor rates.
The ability for merchants to quickly implement their businesses into a trusted payment processor is another key component to growth. To satisfy the aforementioned consumer expectations and needs, the user experience should be taken into account. Depending on each unique demographic, payment processing tools should be reasoned based on the current trends. For instance, when it comes to a younger demographic, digital transactions through mobile phones would be appealing due to the ease of access, as well as familiarity with the technology.
Merchant Broker understands that selecting the best credit card processors can be a challenge. There are several options available in the market, as well as the need to learn the details of how each processor operates in order to fully comply by federal and provincial policies.
In order to ensure that businesses are operating at maximum efficiency and able to have increased monetary profits, Merchant Broker is connected to several industry leaders that, when in collaboration with the team, are able to offer the best rates.
Even with AMEX, for example, Merchant Broker can negotiate for lower rates on a business owner’s behalf. Merchant Broker also helps to expedite the equipment delivery process, so business partners are able to receive their equipment quickly after approval.
The goal of Merchant Broker is to mitigate as much risk as possible, as well as ensure the confidentiality of our current and potential business partners. Above all, Merchant Brokerprides itself with stellar customer service by virtue of making the process as stress-free as possible while yielding the best results.
Driven to serving clients and helping the cannabis industry as a whole, Merchant Broker is prepared to hit the ground running for clients of all backgrounds and circumstances. For a full consultation and to take your business to the next level, contact Merchant Broker’s team of dedicated experts at either 1-888-668-0733 or firstname.lastname@example.org.