SDZ Cannabis Payment Processing with YuuPay
Please fill out and submit the form and the SDZ and YuuPay team will contact you in reference to your global processing requirements. SDZ and YuuPay process in all the major currencies and product purchased and delivery is limited to states and countries where the product is sold legally.
Payment Gateway Explained
A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its customers, but can be provided by a specialised ﬁnancial service provider as a separate service, such as a payment service provider.
A payment gateway facilitates a payment transaction by the transfer of information between a payment portal (such as a Cannabis website, mobile phone or interactive voice response service) and the front end processor or acquiring bank.
When a customer orders a product from a payment gateway-enabled merchant, the payment gateway performs a variety of tasks to process the transaction.
A customer places an order on website by pressing the ‘Submit Order’ or equivalent button, or perhaps enters their card details using an automatic phone answering service.
If the order is via a website, the customer’s web browser encrypts the information to be sent between the browser and the merchant’s webserver. In between other methods, this may be done via SSL (Secure Socket Layer) encryption. The payment gateway may allow transaction data to be sent directly from the customer’s browser to the gateway, bypassing the merchant’s systems. This reduces the merchant’s Payment Card Industry Data Security Standard (PCI DSS) compliance obligations without redirecting the customer away from the website.
The merchant then forwards the transaction details to their payment gateway. This is another (SSL) encrypted connection to the payment server hosted by the payment gateway. The payment gateway converts the message from XML to ISO 8583 or a variant message format (format understood by EFT Switches) and then forwards the transaction information to the payment processor used by the merchant’s acquiring bank
The payment processor forwards the transaction information to the card association (I.e.: Visa/ MasterCard/American Express). If an American Express or Discover Card was used, then the card association also acts as the issuing bank and directly provides a response of approved or declined to the payment gateway. Otherwise [e.g.: MasterCard or Visa card was used], the card association routes the transaction to the correct card issuing bank.
The credit card issuing bank receives the authorization request, veriﬁes the credit or debit available and then sends a response back to the processor (via the same process as the request for authorization) with a response code (I.e.:: approved, denied). In addition to communicating the fate of the authorization request, the response code is also used to deﬁne the reason why the transaction failed (I.e.: insufﬁcient funds, or bank link not available)
Meanwhile, the credit card issuer holds an authorization associated with that merchant and consumer for the approved amount. This can impact the consumer’s ability to spend further ( because it reduces the line of credit available or it puts a hold on a portion of the funds in a debit account).
The processor forwards the authorization response to the payment gateway. The payment gateway receives the response, and forwards it on to the website (or whatever interface was used to process the payment) where it is interpreted as a relevant response then relayed back to the merchant and cardholder. This is known as the Authorization or “Auth” The entire process typically takes 2–3 seconds.
The merchant then fulﬁlls the order and the above process can be repeated but this time to “Clear” the authorization by consummating the transaction. Typically, the “Clear” is initiated only after the merchant has fulﬁlled the transaction (I.e.: shipped the order). This results in the issuing bank ‘clearing’ the ‘auth’ (i.e.: moves auth-hold to a debit) and prepares them to settle with the merchant acquiring bank. The merchant submits all their approved authorizations, in a “batch” (end of the day), to their acquiring bank for settlement via its processor. This typically reduces or “Clears” the corresponding “Auth” if it has not been explicitly “Cleared”.
The acquiring bank makes the batch settlement request of the credit card issuer. The credit card issuer makes a settlement payment to the acquiring bank (the next day in most cases) The acquiring bank subsequently deposits the total of the approved funds into the merchant’s nominated account (the same day or next day). This could be an account with the acquiring bank if the merchant does their banking with the same bank, or an account with another bank. The entire process from authorization to settlement to funding typically takes 3 days.
Many payment gateways also provide tools to automatically screen orders for fraud and calculate tax in real time prior to the authorization request being sent to the processor. Tools to detect fraud include geolocation, velocity pattern analysis, OFAC list lookups, ‘black-list’ lookups, delivery address veriﬁcation, computer ﬁnger printing technology, identity morphing detection, and basic AVS checks.
YuuPay and SDZ
In 2018 SDZ and YuuPay agreed to partner with a Crypto currency called Pecunia, with Pecunia users will be able to earn coins via dollars spent via the YuuPay gateway.
SDZ will speciﬁcally focus on introducing Cannabis related online retailers to YuuPay with globally processing in currencies accepted in legalised countries for the sale of Cannabis and CBD related products.
According to a research report provided by Marijuana Business Daily, cannabis retail sales continue to increase year-over-year as more states and countries legalize cannabis products for both medical and recreational purposes. Sales in 2018 are expected to increase by approximately 50% when compared to 2017.
Sales value is also on track to reach USD 8 Billion – USD 10 Billion by the end of 2018. In addition, the report speciﬁes that by 2022, annual cannabis sales in the United States could exceed the USD 20 Billion mark, representing a 200% surge from 2017. Legal cannabis markets are presently on the rise in major states such as California, Nevada, Colorado and Washington, amongst others along with countries such as Uruguay and Canada are now fully legal for all sales recreational and medicinal. SDZ will only facilitate recreational processing via YuuPay, and product grown and developed by SDZ will be for medicinal sales only.
This enormous growing market is a huge global opportunity for SDZ and YuuPay to become one of the leading global processors with all banking connections and gateways now in place. Under this agreement SDZ and YuuPay split the fees 50/50 with fees ranging between 5% and 8% depending on the risk proﬁle of the client, and amount that is required to processed.