“Cash creates a huge operational burden and is actually expensive to manage. We are helping cannabis merchants increase sales, stay in compliance, improve operations and grow a satisfied customer base.”
With marijuana being “federally illegal,” traditional banks have been reluctant (for good reason) to finance the cannabis industry. As a result, the industry is largely unbanked and left to operate on a cash basis which of course presents unimaginable risks and constraints. That said, a few daring entrepreneurs have “risked it all” to offer financial services to the industry, and AeroPay is one that stands out.
Dan Muller, the CEO and Founder of AeroPay explains to us what it takes to go beyond “banking the industry” to ensuring that cannabis businesses and their clientele can enjoy seamless digital cash transfers whenever and from wherever they need to.
Meet Dan Muller.
As an intro, how did you find yourself in the cannabis industry?
Cannabis is widely underserved by traditional payment methods and I have always had an interest in financial services for underserved industries. That’s how the idea for AeroPay was originally formed, to solve digital payment problems with a seamless solution that is easy for both businesses and their customers.
Can you explain to us what AeroPay does and how this is crucial, given the banking challenges in the under-served cannabis vertical?
AeroPay provides businesses with a compliant, integrated payment solution that facilitates bank-to-bank transfers through the ACH (Automated Clearing House). We work alongside partner financial institutions and state regulators to ensure the highest levels of transparency.
This eliminates a major pain point for businesses whose payment fulfillment has been at extreme risk. Because of this risk, cannabis merchants have been hesitant to implement cashless, digital payments. Cash creates a huge operational burden and is actually expensive to manage. We are helping cannabis merchants increase sales, stay in compliance, improve operations and grow a satisfied customer base.
The future of cannabis payments; what does this look like?
The future of cannabis payments leaves workarounds behind. The industry no longer has to settle for just any ACH bank-to-bank transfer method. They will be able to select the best one – and not just for this cannabis industry – the best way to move money, period. This is a solution that drives user adoption and increases sales volumes pair with lower cost, even lower risks and the fastest settlement times.
The good news is that this future vision is now a reality.
Digital payments are becoming the norm across industries. What are some of the key things that a business should look for (or be on the lookout for) when choosing a digital payments provider?
When choosing a digital payments provider it’s important to look for a company that will do the work to truly become your partner in payments. To continually innovate the product and customer experience while driving customer adoption and bringing those customers back for more.
The partner who can do that has a vision for payments beyond the transaction. They understand both the business and customer needs. They excel in innovation, consumer marketing and customer service as well as technology and compliance.
When it comes to moving money, you have to have the right people in place.
Open versus closed tech architecture for the cannabis industry. What are some of the pros and cons of each?
In an open system, businesses can add third-party services and features to their existing tech stack to stay ahead of industry fluctuations and, more importantly, remain operationally nimble. When regulations and consumer behaviors are constantly evolving, it is crucial for dispensaries to have a flexible tech stach that’s tailored to respond appropriately.
Conversely, closed systems are one-stop-shop platforms that offer a variety of proprietary features but can only be modified by the company that owns the software. A businesses’ tech stack may determine its ability to stay competitive in its respective market.
Transitioning the cannabis industry from a cash-based to a cashless and cardless system. What will this take?
It will take trust. There are already compliant contactless payment solutions available but not all bank-to-bank (ACH) payment network are created equally. We take a huge step in fraud prevention and reducing risk to the point that we guarantee next day payments. It’s not a solution to eliminate the risks posed by cash and replace them with risks posed by fraud. You have to solve the entire problem while seamlessly reconciling accounts and maintaining regulatory compliance.
As the industry overcomes its challenging financial history and reliance on cash or workarounds, it can embrace the payment solution that is now the best payment for any industry, not just the cannabis industry. Today’s payment solutions drive growth with low fees, high returns, consistent adoption and lower risk. It’s simply the better way to get paid.
What’s next for AeroPay? Are you looking to expand into new markets?
We have several very large partnership announcements coming up that will further accelerate the end-to-end open-architecture solution that will ultimately propel the industry forward. We’ll also be launching a new website this quarter so be sure to check out aeropay.com for a new take on payments and how today’s businesses are moving money.
It was a great pleasure to have this one-on-one with Dan Muller of AeroPay. Readers who wish to keep up with how AeroPay is transforming the industry are welcome to visit their website.