Well-designed open banking payment flows can improve customer satisfaction and reduce cart abandonment, leading to more completed sales.
While not a direct cost reduction, Open Banking when implimented does boost revenue in two ways:
- Customers tend to spend 25% more when using digital payment methods compared to cash.
- Offering convenient payment options can increase customer loyalty and repeat business.
For cannabis dispensaries, open banking payments through ACH transfers is considered the most compliant and reliable non-cash payment methods available.
- It’s important to understand that credit cards and debits are not used.
- Money is moved via the Automated Clearing House (ACH)
- Funds are transferred directly from the buyer’s bank to the merchant’s bank account within seconds.
ACH transactions are 100% compliant with state and federal law.
Unlike traditional card payments, which can take 1 to 3 days to settle, open banking payments often settle instantly or in real-time.
The payments go directly from bank to bank, cutting out the middlemen and making the process as frictionless as possible. This quicker access to funds improves dispensaries’ cash flow.
Unlike traditional card payments, which can take 1 to 3 days to settle, open banking payments often settle instantly or in real-time.
The payments go directly from bank to bank, cutting out the middlemen and making the process as frictionless as possible. This quicker access to funds improves dispensaries’ cash flow.
Open banking payments can significantly lower transaction costs for dispensaries by eliminating intermediaries like credit card networks.
Dispensaries using Pay-By-Bank or Open Banking can cut their payment processing costs by up to 50%.
This reduction in fees directly impacts the bottom line, allowing dispensaries to retain more of their revenue.
Open banking payment processing can significantly reduce transaction costs for cannabis dispensaries in several ways:
- Elimination of Intermediaries
Open banking payments bypass traditional card networks and their associated fees, directly connecting customers’ bank accounts to the dispensary’s account. This elimination of intermediaries results in lower processing fees for each transaction.
2. Lower Fee Structure
Compared to credit card transactions, open banking payments like ACH transfers typically have lower fees. Over time, this can lead to substantial savings for dispensaries, especially those with high transaction volumes.
3. Reduced Cash Handling Costs
By enabling more cashless transactions, open banking reduces the need for cash handling, which can be costly and risky for dispensaries. This decrease in cash management expenses contributes to overall cost savings.
4. Faster Settlement
Open banking payments often settle instantly or in real-time, improving cash flow for dispensaries. This quicker access to funds can reduce the need for short-term financing and associated costs.
5. Operational Efficiency
The automation and integration capabilities of open banking can streamline financial processes, reducing administrative costs associated with manual reconciliation and bookkeeping
By leveraging these cost-saving aspects of open banking, cannabis dispensaries can significantly lower their transaction costs, potentially improving their overall profitability and competitiveness in the market.
Unlike traditional card payments, which can take 1 to 3 days to settle, open banking payments often settle instantly or in real-time.
The payments go directly from bank to bank, cutting out the middlemen and making the process as frictionless as possible. This quicker access to funds improves dispensaries’ cash flow.
Cannabis dispensaries not yet using KJ Proweb’s Open Banking solutions grapple with four fixed operational expenses daily:
- Security measures (guards, vaults, cameras)
- Cash counting and management time
- Armored car services
- Higher insurance premiums
By transitioning to digital payments through Pay-By-Bank, dispensaries can significantly reduce or eliminate many of these cash-related costs, which can range from 4% to 15% of revenue for typical retailers.
Open banking payments utilize strong customer authentication (SCA) protocols, reducing the risk of fraud. Transactions are completed almost in real-time, ensuring that funds are transferred to the correct recipient.
For cannabis dispensaries, open banking payments through ACH transfers is considered the most compliant and reliable non-cash payment methods available.
It’s important to understand that credit card networks are not involved in open banking transactions. Money is moved via the Automated Clearing House (ACH) directly from the buyer’s bank to the merchant’s bank account within seconds.
ACH transactions are 100% compliant with state and federal law.
