Entrepreneurs and investors in the CBD industry are finally seeing the benefits of potentially liberalizing banking rules for cannabis businesses, with a big name in retail payments announcing plans to enter the market.
Square, the tremendously popular payment processor with registers and phone-connected payment processors that have proliferated into a huge swath of businesses worldwide, announced Thursday it would extend its services to CBD businesses.
The announcement came after the SAFE Banking Act continued to move forward in Congress, aimed at letting federally-insured banks have more comfort in dealings with cannabis businesses.
“We believe everyone should be able to participate and thrive in the economy,” Square said in a blog post, according to Forbes. “Today, we’re thrilled to launch our CBD early-access program, which allows businesses in the U.S. to sell CBD products on Square quickly, easily, and securely.” [2]
Square is widely popular for its accommodating registers and payment point-of-sale systems that have enabled thousands of small businesses to take off with very little of the start-up investment often leveraged toward electronic systems in the past.
The company’s tech also allows businesses to operate POS transactions from phones and other devices, a benefit often used in food trucks, to sell Girl Scout Cookies and other enterprises where agility is key.
Forbes reports that Square had previously set up an invite-only pilot for CBD companies to use their services, but this move is the first wide-spread adoption of the platform for cannabis business.
The company will charge users 3.9% for tap, swipe and dip payments at its registers, according to Market Watch. In person transactions will have a ten cent fee, and online payments will have a 30 cent transaction fee while taking in 4.2% of payments. [3]
Square said it would only deal with legitimate retailers of CBD or industrial hemp — products that contain 0.3% THC or less, according to Forbes.
Legal problems with federal insurance have kept banks from interacting with cannabis, and processors like Square have long tried to decide how to handle CBD, which was legalized in 2018.
“If you’re opening a restaurant, there are tens of thousands of laws that you have to comply with,” Square General Counsel Sivan Whiteley told Market Watch. “We just decided to take the extra step to do enhanced due diligence but at the end of the day, sellers are responsible for their own compliance.” [3]
Sources
[1] https://finance.yahoo.com/news/square-welcomes-pot-businesses-digital-190416023.html
