Cannabis Credit Card Processing Solutions

Cannabis businesses in the United States were projected to generate about 33.88 billion dollars in revenue in 2023 alone, with an estimated annual growth rate of 14.66%, according to Statista. Cannabis Credit Card Processing Solutions and Merchant Services is our focus here at Allegiance Service.

You could say that cannabis is a booming market, but it’s a complex one that is still operating in the gray area due to its federally illegal status.

The irony of it all is that businesses are accepting federally legal tender for a federally illegal product.

With federal regulations and high-risk classifications standing in the way, businesses must be careful and do their due diligence when it comes to choosing a payment provider to ensure their operations are compliant and their banks and processors are cannabis friendly.

In this blog post, we’ll explore the challenges, current payment options, and compliant solutions to help your cannabis business thrive while staying on the right side of the law.


Key Takeaways

  • Navigating the complex world of cannabis payments remains a challenge; however, there are compliant and legal solutions to accept all forms of payment.
  • Understanding federal regulations and high-risk business classifications is essential for cannabis businesses to understand compliant vs non-compliant territory.
  • You’ve got multiple payment options, and you can finally accept credit cards compliantly. Connect with us for the latest scoop on compliant processing solutions.
  • How to find the right solution for your business and prioritize compliance, security, competitive fees, contract terms & integrations.
  • Regulatory changes and emerging payment technologies will shape the future of cannabis credit card processing services.

Understanding the Challenges of Cannabis Credit Card Processing

Credit Card Terminal Cannabis Processing

Cannabis businesses, including cannabis dispensaries, face unique hurdles when it comes to accepting credit cards. Despite growing legalization and public support, federal regulations and high-risk business classifications make it difficult for these businesses to find compliant and secure payment processing solutions. As a result, many dispensaries rely on cash transactions or alternative payment methods to keep their doors open.

If this story sounds like your business, we have good news for you. There are stable solutions for you to compliantly accept credit cards.

The lack of access to traditional merchant accounts and banking services has led to the emergence of innovative cannabis payment processing solutions, including cannabis banking solutions, designed to address these challenges. We have the expertise and legal support to help you navigate the solutions available to you.

Allegiance Service is a merchant services company specializing in traditional payment processing and credit card processing for the cannabis industry. We offer reliable and compliant services and tailored for small mom-and-pop pott shops to monster multi-state dispensary chains.

Our legal and compliance team encounters new challenges as regulations and policies shift, and navigating the complexities of federal regulations and industry classifications is not a linear path.

As the cannabis market evolves, we evolve with it, staying a few steps ahead with the support of multiple cannabis-friendly banks and the billion-dollar processor that makes it all possible, ensuring seamless, undisrupted processing for every cannabis business we service.

Federal Regulations

The federally illegal status of cannabis in the United States has a profound impact on the industry’s ability to facilitate debit and credit card transactions. There are thousands of dispensaries that are operating on cash only. This poses a huge risk to businesses and consumers.

Major credit card companies, such as Visa, Mastercard, and American Express, do not permit credit card processing for cannabis businesses due to these federal regulations. This leaves businesses scrambling to find alternative payment methods that comply with both processing and banking regulations.

However, there are modern solutions that have filled this gap, allowing cannabis businesses to process credit cards backed by cannabis-friendly banks.

Addressing these regulatory challenges becomes increasingly vital as the cannabis sector grows and becomes more lucrative, contributing to the long-term success of cannabis payment processing solutions.

High-Risk Classification

Another significant challenge for cannabis businesses is their classification as “high-risk” by credit card companies. This designation stems from federal regulations and the legal status of the industry, which makes it difficult for cannabis businesses to access traditional merchant accounts and credit card processing services.

With limited access to banking services and a higher likelihood of encountering legal risks, cannabis businesses must rely on alternative payment options and use cannabis-friendly banks and payment processors. Cannabis payment options are:

  • Cash
  • Debit card payments
  • PIN debit
  • Online payments
  • Cashless ATM
  • ACH transfers
  • E-Wallet payments
  • AND Lastly… Cannabis-Friendly Credit Card Payment Solutions

Compliant cannabis credit card processing solutions like the ones offered by Allegiance Service have emerged to address these challenges and provide secure payment methods for the industry.

Current Payment Options for Cannabis Businesses

Credit Card Processing Cannabis Dispensary

Given the challenges associated with credit card processing, cannabis businesses have had to explore alternative payment options to keep up with consumer demand. Currently, the most commonly accepted payment methods in the cannabis industry are:

  • Cash transactions
  • Debit cards and PIN debit
  • Cashless ATM
  • Cryptocurrencies
  • And now Credit Cards

Each of these methods comes with its own set of advantages and drawbacks.

While cash has long been the dominant payment method for cannabis businesses, it presents security and logistical challenges.


Cash remains the most widely accepted form of payment for cannabis businesses, primarily due to its convenience and cost-effectiveness. However, relying on cash transactions presents significant challenges for dispensaries, such as the increased likelihood of armed robbery and internal theft.

Furthermore, accounting, handling, storing, counting, and safeguarding large amounts of cash can be cumbersome and time-consuming. Despite these drawbacks, many cannabis businesses continue to rely on cash transactions.

Debit Cards, PIN Debit & Cashless ATM

Debit cards and PIN debit transactions present a more secure and convenient alternative to cash for cannabis businesses. These payment methods allow customers to access their bank accounts at the point of sale, thus reducing the need for physical cash handling.

However, certain compliance measures may need to be implemented to ensure that debit card and PIN debit transactions are permitted.

ACH Transfers

ACH transfers offer a secure and dependable payment option for cannabis businesses. An ACH transfer is a process of transferring funds between banks without the use of checks, wire transfers, or cards. ACH transfers can be a particularly attractive option for businesses looking to reduce the risks and inconveniences associated with handling cash.

The acceptance of ACH payments from customers is often challenging. This is because third-party solutions are typically needed. To ensure a seamless customer experience, it is recommended that the point of sale system be integrated with the ACH payment solution. In this case, customers can simply scan a QR code to complete the payment.


Cryptocurrencies, such as Bitcoin and Ethereum, have gained traction in recent years and offer potential benefits for cannabis businesses. These digital currencies provide a decentralized, anonymous, and secure method of payment. However, the volatility and risk inherent in cryptocurrency make it an infeasible option for most cannabis retailers.

Compliant Cannabis Credit Card Processing Solutions

Credit Card Cannabis Processing

As the cannabis payment landscape evolves, businesses must keep abreast of the latest developments in compliant payment solutions and partner with a payment processor that fulfills their unique needs and requirements.

What to Look For When Vetting Cannabis Credit Card Processors

Choosing a legitimate and reliable cannabis-friendly credit card processor is critical for your business’s success. Here is what you should look for:

  • The processor should be backed by multiple cannabis banking organizations
  • Go through regular audits to validate compliance
  • Prioritize and protect your business compliance, stability, and security
  • Provide a direct line to customer service
  • Offer competitive fees and flexible contracts
  • Provide integration options to seamlessly support your existing systems
  • A track record of reliable, undisrupted service
  • Transparency about all fees and costs involved
  • Industry experience and understanding legal challenges involved in cannabis payment processing
  • Value you and address your needs no matter how big or small

By considering these factors, you can ensure that your chosen partner will help your business grow and thrive in the competitive cannabis industry.

In addition to these factors, it is also important to inquire about their cannabis industry experience, inquire about their fees, cancelation policy, contract terms, and integration capabilities. This transparency and due diligence will enable you to make the best decision when selecting a cannabis credit card processor.

Compliance and Security

Businesses should prioritize compliance with all relevant laws and regulations and consider the long-term success and security of their operations when choosing a processing partner.

Compliance and reliability are the foundational blocks that Allegiance Service merchant services were built on. Our solutions are backed by multiple cannabis-safe banks, we have one of the most robust legal and compliance teams backing our solutions, and our processors go through quarterly audits to ensure we and you are operating legally and compliantly.

We also have over 30 years of combined experience in the cannabis industry and understand its unique challenges and requirements.

Business as usual for you, with no disruptions.

Fees and Contract Terms

Your big advantage is that we don’t play games around exclusives and locked-in contracts. We want your business to thrive. You can run multiple systems with our payment systems. And we won’t lock you down or burden you with fees.

Your best interest is ours, so we make sure there are no barriers to entry.

  1. No long-term contracts
  2. No hidden fees
  3. You can cancel at any time

We have multiple solutions to help you find the most cost-effective and compatible solution for your cannabis business.

What’s most refreshing is we operate with no exclusives or contracts, providing you with the freedom to switch providers or cancel service if needed.

Integration and Customer Experience

Integration and customer experience are also critical factors to consider when choosing a cannabis credit card processor.

Get in touch with Allegiance Service if you have questions about integrations and compatibility with your e-commerce platform or other tools that are essential to your business operations.

This compatibility is essential for efficient operations and an improved customer experience.

In addition to integration, consider the customer experience that modernized checkout solutions can provide for your business. By prioritizing these factors, you can ensure that your merchant service provider will help your business meet the evolving needs and expectations of your customers.

The Future of Cannabis Credit Card Processing

Payment Processing for Cannabis

As the cannabis industry continues to grow and evolve, the future of cannabis credit card processing will be shaped by regulatory changes and emerging payment technologies. Changes to federal regulations or state laws could open up new opportunities for growth and expansion in the industry.

Emerging payment technologies, such as digital wallets, Apple Pay and Google Pay, contactless payments, and mobile payments, are also playing a significant role in shaping the cannabis payment landscape. As these technologies become more prevalent, cannabis businesses must stay informed about the latest developments and adapt their payment processing strategies accordingly, including the adoption of online payments.

Regulatory Changes

Businesses might gain access to more traditional credit card processing services in the future as cannabis regulations continue to evolve. With 91% of Americans supporting the federal legalization of cannabis, reclassifying cannabis’s Schedule I status could facilitate access to traditional banking services and allow for more conventional payment methods.

Cannabis businesses need to keep abreast of potential changes in the regulatory landscape and ensure their long-term success by integrating new modernized payment solutions like credit cards and contactless pay technologies.

Emerging Payment Technologies

In addition to regulatory changes, emerging payment technologies will continue to shape the cannabis payment landscape. Digital wallets, gift cards, contactless payments, and other innovative payment solutions are becoming increasingly popular, offering businesses new ways to accept payments and enhance the customer experience.

By embracing new technologies and remaining flexible, businesses can ensure they are well-positioned to capitalize on the ever-evolving cannabis payment landscape and stay one step ahead of their competition.


Navigating the challenges and complexities of cannabis credit card processing is crucial for businesses looking to thrive in this growing industry. By understanding the unique challenges posed by federal regulations and high-risk classifications, exploring current payment options, and considering compliant solutions, cannabis businesses can better position themselves for success. As the industry continues to evolve, staying informed about regulatory changes and emerging payment technologies will be key to adapting and thriving in the competitive cannabis marketplace.

Cannabis Credit Card Processing

Frequently Asked Questions

Who Is Allegiance Service?

Allegiance Service is a Merchant Services company focused on the Cannabis industry. We provide stable, compliant, easy to use and affordable solutions, from payment processing to marketing and consulting services. Allegiance brings a wealth of experience, knowledge and growth experience. From the founders to our formidable staff, Allegiance offers decades of experience to it’s clients. Get in touch with us today at 1-800-301-5538 or email us at

Is it Legal for Dispensaries to Accept Credit Cards?

What’s not possible is for a cannabis business to be the Merchant of Record with any of the credit card companies. However, there are finally legal, compliant, and normalized solutions for dispensaries to accept credit cards! There are a few solutions that offer this modernized checkout solution. Get in touch with us to learn about your options.

Does Mastercard allow cannabis transactions?

Based on Mastercard’s statement, cannabis transactions are not allowed on their systems due to federal government regulations.

What is a cannabis payment processor?

A cannabis payment processor is a secure, convenient, and compliant system or solution for processing dispensary purchases, such as debit card and credit card processing, cashless ATM, ACH, E-wallet, and online processing.

Where Can I Find a Cannabis-Friendly Bank?

Looking for banking partners? Get in touch with Allegiance Service; we can provide you with a whole directory of cannabis-friendly banks and cannabis financial support services.

What are the main challenges faced by cannabis businesses when it comes to credit card processing?

Credit card processing is a difficult task for cannabis businesses due to federal regulations, high-risk classifications, and limited access to merchant accounts.

What are the current payment options available for cannabis businesses?

Cash, debit cards, ACH transfers, E-wallet transactions, Credit card payments, cryptocurrencies, Online payments, gift cards, Cashless ATM, and more. Connect with Allegiance Service to learn about all the options available for the cannabis industry to make the most informed decision for your business. 


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