Sep 09, 2019 - 02:05 PM
As the cannabis industry grows (but federal legalization remains a pipe dream), the question of how to handle transactions becomes ever more pressing. Brick-and-mortar dispensaries have navigated the issue by becoming cash-only. But online retailers face a bigger challenge.
Is Hypur the answer? In spite of the lack of reviews, it looks promising. Here’s what you should know - and what your alternatives are.
Why Hypur Could Be Worth the Hype
Hypur was started by entrepreneurs with experience in the banking industry, which suggests that they know the right approach to this problem. The company aims to create a bridge between banks and cannabis companies. Hypur also doesn’t just work with cannabis companies - it helps other cash-heavy businesses like pawn shops and payday lenders find banks to work with too.
Image via Pixabay
With Hypur, you’ll partner with a bank that uses Hypur’s technology to confirm that your sales match your deposits. You’ll be working with a bank that’s aware of the cannabis-industry risk, and decided to take it anyway. The banks that partner with Hypur have a need for the added cash flow, so they’re open to working with cannabis brands.
This transparency in partnership makes working with Hypur look appealing. Hypur also helps your customers by allowing them to make simple purchases through Hypur Commerce, which links their bank accounts for cannabis sales. This offers an easy workaround to the constraints of buying marijuana online.
Another promising fact: Hypur has been around since 2014. While the company is still relatively new, it’s survived long enough to prove that its business model works.
What You Should Know Before Using Hypur
To give banks the confidence to work with cannabis companies, Hypur’s software does a thorough audit of a company’s licenses, leases, tax returns, and so on. This ensures that the company is fully legal before a bank partners with them.
If you decide to work with Hypur, you should make sure you have all your legal bases covered first, so the audit goes smoothly. Hypur will also give you automated notifications if a lease or license is about to expire, helping your business stay legal.
Alternatives to Hypur
Traditionally, online cannabis companies have navigated the payment issue by allowing customers to order online, then pay in cash upon delivery.
Needless to say, this method comes with a lot of potential problems. Cash is complicated - there’s the risk of receiving counterfeit money, or delivering to the customer who for some reason doesn’t have cash to pay with upon arrival. While Hypur might seem risky due to the lack of reviews, relying on cash is even riskier.
However, you also have another option. CanPay offers a software alternative that works a lot like Hypur: banks can apply to be in CanPay’s network, and customers can make electronic payments through the system. And, unlike Hypur, CanPay is specifically aimed at the cannabis industry.
Both Hypur and CanPay offer ecommerce solutions for cannabis stores that are far superior to relying on cash.
Neither one of these options has been reviewed online, but both sound like solid choices. My guess is that the lack of reviews can be chalked up to how niche these solutions are. Both CanPay and Hypur have been around long enough to suggest that they offer something reliable (CanPay debuted in 2016), so I don’t think the lack of reviews should scare you off.
To choose between the two, I’d suggest looking at the financial institutions each one partners with. Find a bank you want to work with, then choose the software that works with that bank.
The online cannabis world is poised for rapid growth, so now is the time to get in. CanPay or Hypur will help you get started. Soon, the cannabis industry may become as legitimate as any other industry, allowing you to do ordinary banking and take ordinary payments. But with these software options, there’s no need to wait for that day to come before opening up shop.