(USNewsMag.com) – Mastercard has requested that banks as well as payment processors stop allowing marijuana transactions using its PIN debit cards. Mastercard issued cease-and-desist letters to financial institutions that had been facilitating PIN debit card payments at marijuana dispensaries.
A spokesperson for Mastercard said that customers are “required to conduct lawful activity.” The spokesperson added that the company does not allow the purchases because “The federal government considers cannabis sales illegal.” Though marijuana is legal in 38 U.S. states, it is not legal on the federal level. This creates a challenge for marijuana consumers as well as state-legal businesses.
Marijuana dispensaries are unable to accept payment by credit card due to the fact it is still illegal at the federal level.
In 2021, Visa stated the use of cashless ATMs by marijuana dispensaries violated the company’s policy against marijuana. Safe Harbor Financial Services Chief Strategic Business Development Officer Tyler Beuerlein said people had migrated away from cashless ATMs over to PIN debit cards over the past year and a half.
Smaller regional banks may still be able to serve marijuana dispensaries. As well as ACH payments, though they are seen as inconvenient for customers as ACH payments require routing and bank account numbers.
However, the move by Mastercard will further limit non-cash purchasing options, meaning most transactions will require cash, which marijuana dispensaries sometimes view as risky due to the potential for theft.
Legislation has been proposed that is currently awaiting a vote called the SAFE Banking Act, which addresses some of the banking issues involved with states that have legalized marijuana. It would prevent financial institutions from being penalized by federal regulators for serving marijuana dispensaries, owners as well as employees. It also states funds from marijuana dispensaries would not be treated as funds from an illegal activity. A vote on the bill, which has bipartisan support, has yet to be scheduled by the Senate Banking Committee Chairman as of July 27.
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