The legalization of marijuana in many parts of the world has created an industry that is still considered high risk due to the legal and regulatory uncertainties surrounding cannabis. This makes it difficult for marijuana companies to find payment processing solutions for their businesses. In this blog post, we will discuss how processors work with high risk companies like marijuana companies.

The first thing that processors do when working with high risk companies like marijuana companies is to assess the level of risk involved. This is done by reviewing the company’s financial statements, business model, and compliance with regulations. If the processor determines that the risk is too high, they may decline to work with the company.

If the processor determines that the risk is acceptable, they will then work with the company to set up a merchant account. This is a special type of account that allows the company to accept credit and debit card payments. The processor will review the company’s application and may request additional information such as financial statements and tax returns.

Once the merchant account is set up, the processor will then process payments for the company. This is done by securely transferring funds from the customer’s credit or debit card to the company’s merchant account. The processor may also charge a fee for this service, which is typically a percentage of the transaction amount.

To ensure that the payments are secure, the processor will also implement advanced security measures such as encryption and fraud detection. This helps to protect the company and its customers from unauthorized transactions and identity theft.

In addition to payment processing, some processors may also provide additional services such as chargeback prevention and dispute resolution. This can be especially important for high risk companies like marijuana companies, which may face a higher risk of chargebacks and disputes.

Overall, payment processors play a critical role in the operation of high risk companies like cannabis companies. By providing secure and reliable payment processing services, processors help these companies to operate in a challenging and constantly evolving regulatory landscape.