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POSaBIT Systems Corp. strengthened its position in the cannabis-payments processing market with the $7.5 million acquisition of Scottsdale, Ariz.-based Hypur Inc., a provider of payment and compliance solutions to high-risk merchants, including cannabis dispensaries, CBD retailers, and merchants that accept cryptocurrency.
POSaBIT says the acquisition will provide it with a more comprehensive suite of payment and compliance solutions for the cannabis industry, including redundant PIN debit payment processing, ACH e-commerce and mobile payment solution, and compliance technology for financial institutions serving the cannabis industry.
Through the acquisition, Kirkland, Wash.-based POSaBIT will gain direct relationships with processors and financial institutions serving recreational and medical cannabis industries. As a result, POSaBIT will become a one-stop shop for payment and bank compliance needs for cannabis dispensaries, processors, cultivators, distributors, and the financial institutions that serve them.
In addition, the acquisition of more than 150 merchant locations generating more than $100 million in annualized payment gross merchandise value to POSaBIT’s portfolio. Another 60 Hypur merchant locations are expected to go live in the next 90 days. In 2022, Hypur generated $5.3 million in revenue and $1.3 million in gross profit. Hypur has processed more than 1 million cannabis transactions, according to its web site. The Hypur acquisition follows POSaBIT’s $4 million deal in January to acquire MJ Platform, Leaf Data Systems, and Ample Organics from Akerna Corp.
“Hypur’s innovative technology and deep expertise in compliance and payments further enhances our platform and enables us to serve the needs of our customers better,” POSaBIT chief executive and co-founder Ryan Hamlin says in a prepared statement.
Hypur’s product portfolio includes the Hypur Pay app, which enables ACH-based e-commerce payments, as well ACH payments through the app and in-store. The app is used by more than 165,000 consumers.
Hypur also offers a PIN debit program for cannabis merchants that allows consumers to use their debit card for card present transactions in-store, curbside pick-up, and in-home deliveries. The solution does not violate major card network rules when it comes to cannabis payments, the company says. Hypur claims it is fully transparent with the financial institutions and processors with which it works that they are facilitating payments for cannabis merchants, according to the company’s web site.
“We have been providing compliance and payment technology to financial institutions serving the cannabis industry for nearly a decade and look forward to expanding our reach with POSaBIT,” Hypur chief executive Michael J. Sinnwell Jr., says in a statement.
POSaBIT, which will report its 2022 fiscal year earnings later this month, projected 2023 fiscal year revenues of $60 to $63 million and gross profit of $15 to $17 million.
