Master Growers Are Pulling 6 Figures and So Can You just use discount code: bws20 during enrollment Here while coupon code is still active!

Last Updated on by Aardvark

Visa recently issued a memo detailing a common scheme being used by businesses in the cannabis industry—“cashless ATM” point-of-sale (POS) transactions. Cashless ATM transactions take place when a merchant takes an order, rounds up the total to an even number, and then runs a transaction, miscoded as an ATM withdrawal.

Enter Discount Code: 20AS-661091 and get up to 30% off your ENTIRE seed order + free seeds Buy Seeds Here

While cannabis companies weren’t explicitly mentioned in Visa’s memo—there’s a good chance it was directed at such companies given the prevalence of cashless ATMs in the cannabis industry. With few options left in the cash-only industry, businesses will try just about anything to make credit and debit card purchases possible.

“Visa is aware of a scheme where POS devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets and are operating in violation of the Visa Core Rules and Visa Product and Service Rules and Plus Core Rules and Plus Product and Service Rules,” the memo reads.

Typically, a purchase is rounded up to the nearest denominator of twenty dollar bills. Cashless ATMs mimic standalone ATM machines, running the transaction backwards, so to speak. Visa explained that the practice is in violation because it affects the integrity of an ATM transaction, something Visa never intended to do.

“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders,” the memo continues. “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…”

Alternatives are provided from technology platforms that are specifically tailored to meet the financial needs of merchants in the cannabis industry.

“The cashless ATM trend is damaging to investors, dispensaries, and consumers, as when it comes down to it, it’s blatant money laundering,” CannaTrac CEO Tom Gavin told High Times. “Instead of creating loopholes and using a cashless ATM, dispensaries should take advantage of other solutions currently on the market that are safe, legal, and transparent. A proper financial solution should be registered with FinCEN and have a money transmitter license, or be the agent of a sponsor or bank with a money transmitter license in their state.”

Gavin continued, “cashless ATMs harm everyone involved by putting investors’ hard-earned money at risk and the potential of dispensary shutdowns that will hinder medical patients’ ability to access their medicine. Until permanent regulations are available at the federal level, solutions (such as CannaCard) that exist today should be used to manage transactions properly for all parties involved.”

Thousands of dispensaries could be hugely impacted by Visa’s compliance reminder. CannaTrac’s digital payment system simplifies the payment process and provides credit card processing for cannabis business—without having to resort to cashless ATMs.

Cashless ATM Transactions in a Cash Industry

Given federal restrictions on cannabis, the industry remains mostly cash-based, leading businesses to try just about everything to get around the restrictions on credit card transactions. Secure and Fair Enforcement (SAFE) Banking Act would solve that issue, but it was recently stripped from the National Defense Authorization Act (NDAA).

Major credit card networks—Visa, Mastercard, American Express—all avoid the cannabis industry, given the risk of repercussions from federal agencies.

Visa’s memo isn’t entirely clear what the punishment for violation of rules will be, however enforcement will be applied in the event that Visa becomes aware of ongoing cashless ATM practices.

“Acquirers will be subject to non-compliance assessments and/or penalties, when they—or their third party agents—are found in material non-compliance with the Visa Rules,” the memo continues. “When found to have willfully violated the Visa Rules, adversely affecting the goodwill associated with Visa and/or the Plus system, brand, products and services, an acquirer may be subject to further compliance enforcement.”

Until cannabis is removed from Schedule 1 of the list of controlled substances, schemes such as cashless ATMs and other financial loopholes will continue to take place as cannabis companies are left with few other options.

The post Visa Warns About Cashless ATM Trend Common in Cannabis Industry appeared first on High Times.

Please Share This:

By Aardvark

How's it going fellow growers and smokers! I'm the Aardvark and have been growing and doing grow shows online for many years now. I have helped various companies launch as well as helped test grow for specific breeders trying to prove out certain strains and traits.