Financial Innovation in Challenging Industries

At the center of compliance technology and transparent financial services, you’ll find André Herrera. André is the Chief Compliance Officer at Hypur, a company that provides payment and regulatory technologies for challenging industries. Hypur developed a platform used exclusively by cannabis related businesses that helps both legitimize and streamline their financial transactions. Now, he wants to bring those who have operated in the margins into the light through this innovative technology.

André began his career in finance over 28 years ago. He has extensive experience in banking and payments and was at the forefront of the emergence of prepaid and digital currencies. He joined Hypur in 2014 to build a compliance and monitoring system for the cannabis space from the ground up. Hypur offers payment solutions for cannabis related businesses. It also provides regulatory technology used by banks and credit unions, enabling them to bank cannabis related businesses and other challenging verticals.

Operating in a New Landscape

The cannabis industry is growing rapidly, and with an economic impact expected at $77 billion by 2022, there is an urgent need for sustainable financial services. Most banking technologies were designed for typical types of businesses such as retail stores and restaurants, which do not support the needs of this unique industry. André and the engineering team at Hypur developed tools to overcome the difficulties cannabis related businesses faced when using traditional banking services.

Due to the illegality of cannabis at the federal level, many businesses have grown accustomed to using black market solutions to process their finances and obtain funding. It isn’t uncommon for organizations to lie on banking applications, open multiple limited license companies, or use off-shore bank accounts. André wants to change that by building trusting relationships. “When we started looking at cannabis, we realized transparency is the only way to conduct business,” he explains. “It takes honesty in dealing with payment providers and bankers.”

Putting up Guardrails

Another issue in working in the cannabis space is a lack of established best practices for banking and compliance. Other financial services, such as mortgages and vehicle loans, come with thousands of pages of regulations and guidance, rigorous testing requirements, and examination handbooks. This simply does not exist in the cannabis space. There is very little federal guidance on how to provide financial services to marijuana related businesses, leaving many financial institutions with uncertainties. Hypur has helped establish best practices and develop levels of compliance. These best practices continue to evolve over time. They’re committed to quality by setting high standards in an industry in need of financial services.

The rise of CBD and hemp processing has also created issues for financial services. Unlike marijuana, federally legal CBD and hemp products are only allowed to contain a maximum 0.3% of THC, the psychoactive component of cannabis. Due to differences in cultivation, processing, and the variations in products being sold, financial institutions are hesitant to provide funding because of the risk of non-compliance with federal standards. Though hemp is technically legal, many questions still remain. In this early stage, it can actually more difficult to provide banking for hemp than cannabis. André is confident that with better guidance and regulation over time, this will improve.

Using Tech to Build a Coalition

One of the biggest challenges in banking today comes from outdated systems. “I started banking in 1992 and a lot of systems haven’t changed over decades,” says André. Since Hypur began building technology specifically catered to the cannabis industry and regulatory compliance, they’ve overcome these hurdles. “We weren’t having to rely on older, legacy systems. It’s the biggest advantage that we have from a technological standpoint.”

Hypur’s technology was designed to lower the risk for bankers though transparency and improved monitoring. They engineered their services for vertical enterprises, able to reduce the risk and overhead of banks and credit unions servicing the market. Many businesses are accustomed to operating a non-transparent manner. It is André’s goal to guide those businesses into compliance and bring the industry into the open.

The Future of Finance in Challenging Industries

With the rising interest in cannabis related businesses and the recent passage of the SAFE Banking Act in 2019 by Congress, there is no denying the vast opportunities within the industry. Financial industries are searching for guidance and regulation, but there aren’t any quick solutions. Companies like Hypur serve a vital role in fostering relationships between businesses, regulators, and financial institutions. André hopes bridging gaps through technology will improve transparency and compliance, building strong connections throughout the industry.

When asked what he’d do every day for the rest of his life, André didn’t hesitate to answer: This. “Hypur is very passionate about what we do,” he says. “I enjoy that I’m paving the ground and setting best practices for an emerging business. We are not going to see an opportunity like this again in our lifetime.”

To learn more about André Herrera and Hypur, visit www.hypur.com.

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