Visa Warns Against Misuse Of ‘Cashless ATMs’ Used By Cannabis Retailers To Skirt Restrictions

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Visa, the world’s second-largest card payment company, recently issued a compliance memo to customers warning them that miscoding point-of-sale transactions through the use of so-called cashless ATMs—a practice used by some cannabis retailers as a workaround to accept credit or debit cards for purchases—could lead to penalties or other unspecified enforcement action.

The warning comes as congressional lawmakers grapple with how to handle marijuana business banking. The House passed a defense bill in September with language that would have protected banks that work with state-legal cannabis companies, but after talks with the Senate, those provisions were not attached to a new bicameral deal filed Tuesday.

The December 2 memo from Visa that was obtained by Marijuana Moment says the company is “aware of a scheme” in which merchants are using the cashless ATMs to effectively sidestep restrictions on what types of sales that payment cards can be used for.

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

Source: Visa Warns Against Misuse Of ‘Cashless ATMs’ Used By Cannabis Retailers To Skirt Restrictions – Marijuana Moment

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