"Ask Me Anything" with CEO Jordan Friedman and COO David Ehrlich from Zodaka.
Navigating payment solutions in today’s complicated cannabis space can be not only difficult, but terrifying! Zodaka can ease your fears and worries. Think of Zodaka like the PayPal of cannabis. Let’s let the experts explain how they do it. Join us this Wednesday for another edition of our Growers Network AMA series.
Who: CEO Jordan Friedman and COO David Ehrlich What: Mitigating cannabis financial woes Where: Right here When: Wednesday, December 12, 2018 at 11 AM PST
Let’s get down to brass tacks right off the bat… I know it probably depends on volume, but what are your base processing rates and transaction fees (i.e 2.9% + $0.30)? If it also depends on risk factors, how do the the base rates for different sectors of the industry compare (i.e retail dispensary POS vs cultivation B2B transactions vs cannabis SaaS digital payments)?
Great question! I’ll get right to it. The main factors determining what the processing rate is for any given merchant are what platform you are utilizing Zodaka through as well as what level of the supply chain you are in. For this reason there is no one number that I can give you as our & “base rate”. However for most B2C transactions the rate is a little under 4% with a $0.35 flat fee and for B2B transactions it is generally a little under 2.5% with a $5 flat fee for each transaction. Over time we hope to lower these rates as higher volume will allow us to lessen our costs.
Those are some good rates! There’s some gouging going in this space with others starting at 5% or higher from what I’ve seen. Followup question: in the case of a cannabis SaaS company is Zodaka stand alone with a Rest API (like PayPal or Stripe), or do you have to use another base platform to process digital payments through an app or website? If you have to use another platform, what is recommended or common with your current customers?
Haha well that one’s interesting. In 2014 my co-founder/CEO Jordan Friedman and I started talking about technology in cannabis and how we saw it as a vastly under-served market. We started hatching an idea right then and there for a cannabis delivery that would utilize technology to provide better service at lower prices. As time went on we pivoted from developing a cannabis delivery to developing a business management platform for other deliveries. During this time Jordan dove headfirst into researching every aspect of digital payment methods and regulation, becoming an expert. After years of research he discovered a way we could process payment in cannabis and together we crafted it to be a Paypal-like user experience that doesn’t come with with foreign banks, rolling reserves, or the risk of getting shut down due to financial regulations.
Once that code was cracked we re-shifted everything we were doing to be the new standard in Cannabis payment. Moving into 2019 we are excited to bring our solution to the market in a bigger way then ever before.
“Necessity is the mother of invention” …case in point Zodaka!
@memberdirectory we are off to the races with another AMA. Come join the party and let’s talk about payment processing solutions for your canna-business!
Hey all! Great conversation so far. Just wanted to weigh in as the podcast we sponsor just interviewed Zodaka Founder & CEO Jordan Friedman on a recent show. He does a great job explaining how Zodaka works and it’s a great resource to anyone in this thread who wants to learn more about their company.
It seems like the cannabis industry is in need of some maturation in terms of financial awareness and risk mitigation (some of that is a product of the historical prohibition of cannabis). I feel there are many cannabis professionals that simply fail to see the need for effective payment processing solutions. Would you agree?
How do you get through to those individuals who need your services but are otherwise afraid to initiate the engagement?
Sorry for maybe asking some simple questions but I really didn’t have anytime yet to check out your website. Can you tell me if you can help European companies also with their processing? Also what makes your system different from other payment processors who accept high risk businesses?
Thanks Tyler! This is CEO Jordan Friedman here. We have worked really hard to bring our solution to the market at a cost-effective rate. We believe merchants have been treated poorly by traditional high-risk payment providers and we’re here to change that.
Zodaka is built as a Rest API and we started allowing integrations a little over a month ago. So far we’ve gotten really good feedback on our API and how easy it is integrate. If anyone is interested in discussing an integration and partnership we’d love to hear about it! Shoot us a D.M. or email David@Zodaka.com to start that discussion.
When it comes to e-commerce we have a WooCommerce plugin which is available to merchants now, and in the coming months we will also be offering a Shopify plugin. On both of these platforms we plug in seamlessly as your pay button with no integration required. Outside of traditional Ecommerce we are currently partnering and integrating with a multitude of the platforms powering the cannabis industry. We can serve all levels of the supply chain and nearly any business type including everything from online B2B marketplaces to in-store dispensary POS systems. We are also working on a stand-alone version for businesses using platforms that haven’t integrated with us that will be released in 2019.
Unfortunately at this time we are unable to service European Businesses. This functionality is in the early stages of development and we will be rolling it out as soon as it is available, though when exactly that will be is to be determined.
The main way we differ from other high risk processors is that our platform is not based on credit or debit cards, which are not allowed in cannabis. Consumers become a Zodaka user by signing up and connecting to their bank account (which takes less than a minute) and then they are immediately able to begin initiating transactions that go from the consumers bank account directly to the merchant’s account without using any payment methods that are illegal or non-compliant for cannabis and the high risk processing space. Since our payment system does not run afoul of any federal payment regulations, we are also able to process entirely within the United States without resorting to using foreign accounts. For this reason we can operate in every state where cannabis is medically or recreationally legal.
One of our other biggest differentiating factors is that we custom fit the banking piece of our solution around the needs of the client we are working with. We don’t force anyone to get a compliant checking account, but can get you one if you need it! If you have already have a bank solution then we have a program in place to protect your bank account from shutdown.
Between our fully customizable banking solution and payment service, we believe we offer the most flexible financial service package in the entire cannabis industry.
It tends to be a mixed bag. One of the biggest roadblocks for new clients is their lack of a bank account to put funds into! By providing compliant banking options we enable our clients to work with us and modernize their business.
Some merchants are desperately searching for solutions while others do not understand why they need them in the first place. The simplest (and most effective) argument to make for switching to our service is that compliant, electronic payment systems actually help you increase your profits! Data shows that when you accept electronic payment your average order size is much higher because customers are not limited by the cash in their pocket, and the ease and convenience of using a simple digital solution encourages customers to continue to purchase from your business. Using an electronic solution like Zodaka also opens up new revenue streams for your business as you can offer services like online order for in-store pickup, or greater functionality in a delivery service. Last but not least, you can save a tremendous amount of money on security and cash management services!
Anybody who has ever visited a dispensary with no cash has certainly experienced the woes of the cash economy in the retail cannabis world! Nothing like pulling out your wallet only to discover plastic, then having to either walk out with no herbal products in hand or pay the exorbitant ATM fees…
These payment solutions aren’t only convenient, they are absolutely necessary!
Hey Nick, interesting question. We are actually our own payment gateway and we plug in to your site or POS. We have a Woocommerce plugin currently with a Shopify plugin coming soon. We are integrating with many of the platforms currently powering sales for the cannabis industry but as of today we are not ready to list which companies those are or when exactly the integrations will go live (you can expect to start seeing them in early 2019). As soon as we are we will make sure to post them here so people can know how to work with us!
Absolutely they do! Ancillary business often have problems with payment for a multitude of complex reasons. Our service does not have a transaction limit making it a great fit for B2B purchases. No more having to transport cash to purchase products, conduct wholesale purchases like every other industry has since the 90’s!
