Cashless ATMs allow customers to use their bank cards to buy cannabis, in spite of federal prohibition. Money gets taken out of their account and goes to the dispensary. Sounds about right, no?
However, Visa Inc. (NYSE:V) recently issued another warning that cashless ATMs used by many cannabis dispensaries violate its service rules. This move may force legal pot businesses to operate, even more than they are now, in cash, reported Marijuana Moment.
“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders. Instead, the devices are used for purchase transactions, which are miscoded as ATM cash disbursements. Purchase amounts are often rounded up to create the appearance of a cash disbursement,” Visa said in a memo.
“Cashless ATMs are primarily marketed to merchant types that are unable to obtain payment services—whether due to the Visa Rules, the rules of other networks, or legal or regulatory prohibitions. Therefore, supporting this scheme affects the integrity of VisaNet and the Plus network, as well as the Visa payment system,” added the financial institution.
Nathaniel Gurien, CEO of Fincann, which provides financial services specifically to cannabis businesses, estimated that thousands of cannabis retailers in the U.S. currently use what he called “the cashless ATM solution” in order to accept cards, a setup he described as clever but not legal.
“What keeps me up at night is that when, not if, one or more eager assistant U.S. attorneys with their eye on advancement sinks their teeth into this, it has the catastrophic potential to derail our industry’s momentum and inflict great damage,” Gurien said in an email to Marijuana Moment.
Photo By Giorgio Trovato On Unsplash.
