When you pay for cannabis online or at a dispensary, the last thing you’re probably thinking about is how whether the payment method is safe. But if something doesn’t seem right, it’s best to trust your instincts. There are plenty of shady operators in the cannabis industry and using them could put you at risk.
Your money becomes more well-traveled than you are
As lovely as a trip to the Cayman Islands or Mauritius might sound, there can be some concerns if your money travels offshore without you. Because the branded card networks don’t want to be involved in the cannabis industry, cannabis credit card processing is not available. There are two main ways that dispensaries get around this: they lie about the product being sold or they work with an offshore payment processor.
What’s wrong with offshore payment processors? One problem you can encounter is the lack of support when there’s a problem. Unless your bank or credit union has a relationship with financial institutions in the offshore country, they might not be able to help you in the event of fraudulent charges.
Another issue can arise if your bank is working to protect you from fraud. Most banks and credit unions flag purchases that are outside your normal activity. If it appears you’re suddenly buying groceries in the Caribbean or flowers from the Isle of Man, they could stop the transaction or block your card to protect you from what looks like fraud. You may even be contacted by your financial institution so that they can ask for further details about your purchase if it appears you’ve made a suspicious transaction.
Ridiculous and compounding fees
Just the explanation of a cashless ATM (or point of banking device) is confusing for most people. Imagine telling someone in any industry other than cannabis that they will do an ATM withdrawal that gives a slip of paper, which is then used to purchase product, and then get change back with the receipt. It’s bizarre and sounds inherently shady. But it can also get absurdly expensive.
Most dispensaries charge you for using a cashless ATM, somewhere in the region of $3.50 to $5. Add to that the fee your bank charges for making an out-of-network ATM withdrawal, and you’re looking at $10 in fees that you could have spent on purchasing product. If you visit the dispensary every two weeks, that’s $260 a year in ATM fees. Of course, if you buy cannabis more often, you could end up losing even more money to ATM fees.
Card skimming and data theft
Whether you’re using an ATM at a dispensary, or a weird workaround payment scheme, you’ll want to be particularly vigilant to avoid skimming. Because these solutions are not necessarily used the way that creators intended, they might not be subject to the same degree of oversight or management. This means that a criminal could attach a card skimmer to an ATM without it being flagged as efficiently as mainstream ATMs.
But it’s not just card skimming scams that you should watch out for. There are other ways that criminals can use these unusual payment schemes. For example, you may need to give your personal details to authorize a transaction, but if these aren’t reputable payment sources, they might not be using the appropriate levels of data security. This can result in identity theft, including fraudulent transactions in your name.
The risks of cash
Cash is one of the most common forms of payment at a dispensary, and one that many of you will consider falling back on after hearing about all these shady options in the market. But it’s important to also be aware of the risks that come with using cash.
One of the most common worries when using cash is theft. You’ve probably had that worried feeling when you withdraw a large sum of money to use at the dispensary – just walking around with that much money can feel like you’ve become a magnet for crime. But even if you don’t need to worry about theft, you may be equally wary about losing your money. If you lose your cash, there’s no way to know you’ll get it back. As a result, carrying cash can be nerve-wracking and cause anxiety.
Another concern about cash is germs. Cash is gross and always has been. Now, with very real worries about how cash can transmit illnesses, on top of how close you need to interact to exchange cash, many people are avoiding cash payments altogether.
Finally, using cash at a dispensary can also be bad for the cannabis industry. As we move towards a culture of normalizing cannabis use, everyone needs to do their part to make cannabis act like a legitimate market. Normal businesses aren’t typically conducted mostly in cash. As a result, every time you pay with Hypur, you’re helping to make cannabis more mainstream.