High Times recently posted an article about how Mastercard announced a ban on Debit Card transactions for weed purchases.
Are we surprised? No. This just means more pain for the cannabis industry. Unfortunately, many topics surrounding cannabis has such a negative stigma. This is just another to add to the list.
Do you have/use a Mastercard debit card? Do you use it to buy weed at dispensaries?
Thankfully, here at PassinGrass Delivery, we don’t accept card transactions. We accept cash AND we come to you!
Below is the article.
“Payment processing powerhouse Mastercard this week revealed the company is taking steps to prevent PIN-based debit card transactions for marijuana purchases, dealing a blow to a regulated cannabis industry already struggling with limited payment options for consumers.
On Wednesday, Bloomberg reported that Mastercard, the world’s second-largest payment solutions provider, had informed financial institutions and other payment processors to stop allowing marijuana purchases to be processed with debit cards. Because of tight federal restrictions on banks that do business with marijuana companies, even those legal under state law, most financial institutions decline to provide common banking services including credit card processing to such businesses.
In a statement, a spokesman for Mastercard said that the action was taken after it learned that cannabis dispensaries were accepting debit cards for pot purchases.
“As we were made aware of this matter, we quickly investigated it,” the spokesman said. “In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity.”
“The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems,” the Mastercard spokesperson added.
Dispensaries Look For New Solutions
As Mastercard’s shutdown of debit card purchases for weed began to take hold last week, cannabis dispensaries that had been using the process began to look for new payment solutions. Peter Su, director of specialty banking at Hanover Bank, has headed cannabis banking programs and served as a payment processing consultant for the industry. He said that he began fielding calls about the situation last week and is hearing from even more companies this week.
“My phones are ringing off the hook — people are asking for payment alternatives,” Su said.
Last year, some of the largest processors of ATM transactions, such as NCR Corp.’s Columbus Data Services, shut down another payment processing system popular with dispensaries known as cashless ATMs that let consumers use their debit card to process a cash withdrawal, which would then be used to pay for cannabis. Tyler Beuerlein, chief strategic business development officer of Safe Harbor Financial Services, a company that provides banking and lending to cannabis businesses, said the crackdown on electronic payment options leaves few alternatives for licensed marijuana retailers to conduct business with their customers.
“More people have migrated to PIN debit in the last year and a half as the cashless ATMs have had issues. If the PIN debit solutions go away, it leaves people back with ACH or cash,” said Beuerlein.
But many consumers consider ACH (automated clearing house) payments, which require purchasers to share their bank account and routing number with the dispensary, to be cumbersome and potentially risky. And cannabis operators would prefer to limit the transactions conducted in cash, which can leave retailers open to robbery and other theft.
Industry Seeks Legislative Solution
A proposed federal legislative solution, the Secure and Fair Enforcement (SAFE) Banking Act, would give cannabis companies legal access to traditional business banking services including credit card processing. But while the bill has bipartisan support in both chambers of Congress and has been approved by the House of Representatives on seven separate occasions, it has yet to receive a vote in the U.S. Senate.
Matt Darin, the CEO of Curaleaf, one of the world’s largest cannabis companies by revenue, said that the news about Mastercard’s crackdown on debit transactions for cannabis purchases “illustrates once again the urgent need for the federal government to recognize the cannabis industry as the tax-paying, job-providing sector that it is.”
“Our industry is one of the fastest-growing sectors in the U.S., generating more than $3.7 billion in state tax revenue in 2022 and employing over 428,000 Americans,” Darin wrote in an email to High Times. “Furthermore, cannabis is legal for medical purposes in 40 states, for recreational purposes in 23 states, and an overwhelming 88% of Americans say that cannabis should be legalized across the country. When will the laws catch up?”
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