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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />City Council <br />Item Number <br />4.6 <br /> <br />Meeting Date <br />May 6, 2024 <br />Prepared By <br />Joe Stremcha, Business Services Director/Assistant <br />City Administrator <br /> <br />Item Description <br />Memorandum of Understanding Agreement 24-12 <br />for Hemp-based THC Payment Processing <br />Reviewed by: <br />Lori Stich <br />Joe Stremcha <br />Cal Portner <br />Tina Allard <br /> <br />Action Requested <br />Approve, by motion, the Memorandum of Understanding Agreement 24-12 for hemp-based THC payment <br />processing with PayProtec. <br /> <br />Background/Discussion <br />Hemp-based THC sales continue to grow every month. This trend is in spite of being a cash-only operation, <br />as customers routinely seek to make payments with debit and credit cards. Staff have considered installing an <br />ATM, but a negative time-consuming customer experience with cash-only would still remain. Staff feel this <br />modern form of payment processing is a vital component in maximizing our operational growth potential. <br /> <br />Westbound and Northbound's credit card payment processor (Heartland) does not allow hemp-based THC <br />product transactions. Heartland has made no efforts to make policy changes to enable the credit card <br />payments for this federally legal product authorized by both the state and federal law. PayProTec is the most <br />compatible vendor that works with our current point-of-sale software that will enable hemp-based THC <br />credit card payments. <br /> <br />Financial Impact <br />PayProTec has a 0.20% processing fee on all transactions. Staff estimates a $5,788.78 increase in annual credit <br />card processing fees resulting from the switch from Heartland based on the 2023 sales history for all products <br />sold through our POS. <br /> <br />Mission/Policy/Goal <br />Good stewards. <br /> <br />Attachments <br />1. Hemp based THC Payment Processing MOU with PayProTec (May 2024) <br /> <br /> <br />Page 54 of 254