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Mastercard demands US cannabis shops stop accepting debit cards
https://www.bbc.com/news/world-us-canada-66320970
The issuer says its debit cards must not be used for legal cannabis, due to federal laws in the US.
https://www.bbc.com/news/world-us-canada-66320970
The issuer says its debit cards must not be used for legal cannabis, due to federal laws in the US.
Kinda an incendiary headline when it’s just Mastercard complying with the law. From the article: "The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems," Really the issue is that Marijuana should be legal at the federal level.
When polled, majorities are in support of legalization. If people would show up to vote more than once every 4 years we could make some actual progress on this issue. But since at least half of registered voters sit out every race, well here we are.
Worth noting that even some conservatives support legalization!
It's too bad those conservatives who do support it are the same people who vote against all of their own interests constantly.
The current president can reschedule marijuana. He won't. He claims not to be conservative, but I'm not convinced.
https://www.jdsupra.com/legalnews/can-president-biden-legalize-marijuana-1220802/
Even though it would be sweet if Joe threw on some aviators and said on national television, "420 legalize it bruh." He can't. It will require congress to be functional and do something that the average American supports.
And yet I bet I can buy mortgaged backed securities
AND shares in pot companies. How fucking illegal. Maybe the federal government can stop these pot companies from being traded openly considering how illegal it is.
Nah maybe the federal government can stop sucking off Goldman Sachs cock and start looking after the people who it claims to represent and who are paying taxes.
Because they, as a corporate entity, don’t want to mess around with the law over something that won’t personally affect their bottom line in a massively positive manner.
Mastercard doesn't give a crap about weed, and aren't trying to control anything. They don't want to be a part of federally illegal transactions. They want to follow the law, because they're a big business and it's dangerous not to. This is simple a result of the fact that weed is federally illegal - any other move on mastercard's part would be irresponsible at this time.
Mastercard is a payment processing company that processes both credit and debit card purchases. They don't actually issue any payment cards themselves, they just want to make sure they aren't processing payments that break federal law.
Credit Cards were introduced in 1950, 73 years ago. Retail stores and oil companies were issuing limited credit cards during the 1920s
Two things, first was a typo. I meant 60 years not 50.
Second, my wording should have been 'Credit Cards, as they are, didn't even exist 60 years ago'. You can argue 1958, but there was no successful credit card that even remotely resembles the modern type in 1950. Even then, it wasn't until late 1960s that the type of predatory credit card was generated. In the 1970s they made it far more aggressive.
The first actual credit card was The Diners Club Card in 1950. American Express arrived in 1958. How we use them today was really introduced in the 1990s though.
Take a deep breath mate, no reason to get so worked up. Pretty sure both of you guys mostly agree with each other, just getting caught up in semantics at this point. Give each other a break :)
Hey there, buddy. It's ok. People are allowed give unsolicited opinions on the internet. No one is trying to hurt you.
Cannabis? Oh man we can't break the law. Better not chance it.
Some weird Bitcoin mortgage backed security being bought by Goldman Sachs to resell to their pension holders? Oh so good.
There should be a law prohibiting these payment companies to be picky when it comes to legal transactions.
Unfortunately, these are illegal according to the federal government, which regulates these financial institutions
I agree on a level, but interstate commerce laws mean that these institutions are held by federal regulation to not accept these payments. As others here have said, the real issue is marijuana needs to just be legalized on the fed level. Then this wouldn’t be an issue.
This is sort of off topic but the constraints credit card companies put on porn is ridiculous. Cannabis, sadly, is illegal federally. Porn is legal everywhere in the country.
I'd very much support legislation that required payment processors to not discriminate against any firm provided the business transaction is legal.
Seriously! I have an extremely specific fetish that has been fucked up multiple times by credit card companies.
Part of the problem here is that marijuana is federally illegal and this opens processors to a lot of potential risk
Also, processors definitely do not want restrictions on what they can process. That's all via public demand and legislation.
They might insofar as companies all become pro-regulation once they get big because it raises the barriers to entry for potential competition.
But absolutely, a lot of the problem are people who think "Oh that fetish is gross, therefore it should be restricted!" No. It's gross to you so don't watch videos of it.
I hope people remember these companies and politicians who attempted to blockade Cannabis businesses when it is invariably made federally legal. They will more than likely never face the consequences of their stupidity while they turn a blind eye to armed robberies that are specifically caused by these policies yet get fat on the tax revenue regardless.
The idea that we need to plead fealty to these degenerates to get them to take common sense approaches to issues that the majority of the voter base has agreed on for a decade is ridiculous. No matter how anybody personally feels about Cannabis consumption it never has and never will go away. Prohibition doesn't work, and attempting to legislate other peoples ethics is a losing gambit.
these companies
How is complying with current law, attempting to blockade Cannabis Businesses?
An Unjust Law Is No Law At All: Excerpts from “Letter from Birmingham Jail”
laws have chilling effects on behaviors this is patently obvious otherwise we wouldn't have a need for legal codes.
Thats cool and all, but fight about it with the federal government, not individual companies...
Time to change lines of business. "We're a taco shop, but you can buy weed here in compliamce with local laws. Sorry if you receipt just says TACOS no matter what you buy. We're working on that."
Basically what dispensaries in Washington, DC do. Everything is a "donation" or an "art purchase" and the pot is a "gift". Total nonsense, but it mostly works, because DC intends to legalize recreational marijuana sales, and Congress isn't letting it happen. So it seems like enforcement is just lax.
I didn't mean to say it would be legal, haha.
I'm just suspicious that there's gonna be a lot of "accidentally" misconfigured Mastercard terminals in the near future.
What has worked in some states is the 'gift pot' strategy. You sell them a vastly overpriced taco and they get a gift of weed along with the snack. Generally the states get upset about this and close the loophole.
Step 1.) Add ATM in lobby. Step 2.) Tell customers they can't use cards because of laws. Step 3.) Customer uses debit card at ATM and then purchases weed with the cash they just used their debit card to get.
Fuck it. Not hard at all.
Yes, but the problem is that the volume of cash makes retailers a massive target. People have been killed over this, and will continue to be put in danger until customers have access to the same payment resources that all other retail businesses take for granted. This is not a trivial issue at all. There are serious real world consequences to these decisions that paint the industry in a bad light when they are a DIRECT consequence of the inaction of the federal government. We are never going back to prohibition. There is simply too much tax revenue generated, and too much public sentiment on the side of both legalization as well as ending the failed drug war policies.
Not just a massive target to criminals either. Cops are willing to pull over armored cars and take the cash when it gets transported. That money then goes through the civil asset forfeiture process, getting handed to the feds who then give some of it back to the local department through their "equitable sharing" program. Legalized theft.
Yes, over 1 million dollars in total with just this one transport company for example: https://ij.org/case/empyreal-forfeiture/
I've been to dispensaries with armed security. They're just as friendly inside as other dispensaries, but wow is that intimidating.
Cash is way more dangerous to hold, these stores get robbed all the time. Just let them process cards
Buy/build your shop like one of those "Check Cashing" places with the impossibly thick glass windows. Keep the cash behind said window.
Banks are kind of shitty here - if you use another bank's ATM, your bank (or the other, or sometimes both) will charge a small fee. Usually it's something like $3, but some smaller banks and credit unions will actually pay all of those fees back, so a lot of folks don't even notice that it's there.
This specific situation is weird because it's a dispensary, though. Thanks to the vagaries of local legality and federal illegality, the dispensaries are totally good selling drugs, but the banks are very much not good openly handling the payments for those drugs. Because of this, most dispensaries will contract their debit payments through a payment processor that can register their card readers as "cashless ATMs," and who will effectively launder all of their debit transactions. The end result of this is that while the customer can pay with a card like a normal store, they end up having to choose between paying the ATM fee at the ATM, or at the register.
The situation makes sense from the pov of the banks. They get to charge you more and get that money instantly for the same transaction.
How it should be: most customers use cash, sometimes they use a card and the dispensary sends a small amount of money (at the end of the month) to the bank for being involved in the process.
How it is: everyone uses an ATM as individuals and get charged a huge non-negotiable fee for that and the banks make money the moment you withdrawal any.
Always look at who gains from a situation to understand the situation.
It got a lot worse in 2008. The federal government shutdown about a third of the banks for not being big enough and with the drop in market competition they started slapping fees on everything.
Never forget what the economists took from us.
ATM fees in the US have been a thing since ATMs have been a thing. It's not new and didn't start in the great recession.
And what do you mean by the government shutting down banks? Banks were killing themselves by doing dirty financial tricks and approving garbage loans and playing hot potato amongst each other with them.
Stress tests. Go read up on it. About 1/3 of banks, almost all midtier, were shutdown by the US government after the crisis has passed. Leaving places like Goldman (which caused the problem to begin with) with less competition. There are less baking companies in the US now then in 2007.
The fee goes to the bank when you use your debit card at the cash register it’s just the merchant that pays it then
This is discriminatory and it shouldn't even need to exist, I mean, heck, you can literally buy legal weed over the internet now and get it delivered to your door, you can purchase seeds too because in 2018 selling hemp was decriminalized federally
So real talk, VISA isn't much better - if you have a business selling tobacco, cannabis, or firearm related products you have a really hard time taking payments online. Most big vendors (like Paypal, Square, etc) won't work with you once you hit $5k to $10k a year in sales (for small businesses starting out you'll slip by for a few months until you grow big enough to get manually audited).
Then you need to find special card processing banks who are approved by VISA to work with tobacco/firearm companies and go through all sorts of review before your store will be approved for processing payments.
And that's just selling hardware like pipes and accessories. I'm not even talking about the raw material itself.
This sucks, but it won't stop anyone, they'll simply switch to another service. I bet VISA's stock will pop tomorrow because of this news if it hasn't already haha
This really isn't that big of a deal anyways. Just deploy an ATM inside the shop as a courtesy. Bonus points if it's a nice machine that can give customers amounts in increments as little as $5.
Since your business has cash as it's main method of payment; it should be fairly simple to keep said ATM stocked up.
This at least would be the cheeky way to get around restrictions.
I highly doubt any sensible dispensary delivers their product! For obvious legal reasons, no, you have to go to their physical location and buy their product physically in-store so that they can make sure you're:
Uh, I pretty much only order delivery in California. They just check your ID at the door, same as with alcohol delivery.
What are you on about? Delivery is a big part of the business. Turns out cannabis users prefer to sit on their couch, who knew? You know besides every single person who uses it regularly or has even watched a stoner comedy once.
The way the dispensaries around me handle it is that they just do a cash withdrawal at the register as if I was using an ATM, so I pay the store in cash and the bank just sees it as getting cash back.
Lol I'm not talking about dispensary businesses. I'm talking about online shops selling hardware like glass pipes and stuff. It's dumb, but it affects many small businesses in the USA.
Sadly there is no simple way to install a virtual ATM for payments on an online store
The messed up part is that while you can't do tobacco product sales using Paypal in the USA, if you're outside the USA paypal will totally take your business. As I've been told directly from Paypal's representatives - they want our business, but it's VISA putting down the rules about what merchant services can work with tobacco/firearm/cannabis sales - and there aren't many in the country (Paypal, Square, etc are not on that list).
The hardware isn't illegal at any level, so it doesn't really affect headshops. Just dispensaries that sell cannabis itself; because cannabis is still federally outlawed.
Can you buy medicine from the pharmacy with online payment? Could not these products all process under that payment system?
Except Mastercard is lying, FinCEN has specifically issued guidance for national finance institutions (banks, credit cards, etc.) to be able to accept cannabis transactions in states that have legalized. Most of these finance institutions are just unwilling to accept the additional cost of complying with the regulations. There’s a reason why Valley National Bank is so popular with cannabis companies - it’s a national bank that follows FinCEN guidelines. It comes at a higher cost, but a lot of companies feel it’s worth it.
And this FinCEN guidance wasn’t just issued - it was issued in 2014. The only reason the cannabis industry doesn’t have widespread access to traditional finance, and why banks keep lobbying for the SAFE Banking Act, is because the banks don’t want to have to do the extra work to comply with the FinCEN guidance.
Note - I agree it’s stupid that cannabis is federally illegal and think it should be legalized (or at the very least deschedule it and let states decide if they’ll allow it). But Mastercard could choose to follow FinCEN guidance if they wanted to.
If you think about it, do you really want a history of federal crimes recorded on your bank account...?
What if dozens/hundreds of individuals were prosecuted for possession of a controlled substance because the DEA a) subpoenas the suppliers to get a list of transactions and B) subpoenas the credit card processors to get info on customers?
Because that's the fear
This is extremely unlikely under the current admin, but we may very well have a far more hostile admin in just under 18 months
I don't live in the US... but if at a certain time the federal government decides to go backwards and wants to charge cannabis purchasers with federal crimes then you're ready to be served up on a platter by your bank.
The context here is payment method, not your willingness to support legal cannabis dispensers.
That would be a pretty big list of people at this point. I don't think it would even be possible to charge all of them. It's just unrealistic especially since it's legal in the state. Possible but unlikely.
You say that, but historically cannabis related charges in particular have been used to target specific parts of the population and individuals. It's the sort of thing that could be exploited nefariously at a convenient moment. Perhaps I'm reading too much in to it.
It could be used to target-prosecute political enemies and "unpopular elements" like police/climate protestors.
Really we just need federal legalization.
Agree. Which is why if the federal government decides to put a clamp down on cannabis use, they're not going to prosecute thousands of users. Prosecuting three or four card payment processing companies and the banks they do business with would have an icy cold chilling effect and bring the industry's cash flows to a dead stop.
I disagree. The federal government has shown every willingness to go after all of us. Imagine a 1000 dollar fine for every pot transaction. You can fight it if you want but that would risk criminal charges. So you take the plea deal.
You'd make sure to register your company financially in a way that doesn't specify the business right?
Is obfuscating what your officially registered business fundamentally really possible? Not going to pass muster legally.
Don't lots of adult goods companies already do this to avoid it saying "big dildos.com" or the like on people's statements?
Right, but that's for your personal privacy, not your legal protection. If a weed company calls itself Cheshire Garden Supplies instead of Weed Weedersons Weed Emporium then that doesn't stop the fact that you bought stuff from a weed dispensary from being a federal crime if push comes to shove. All I'm saying is that cash seems the naturally more sensible option either way.
ITT: Plenty of people who don’t understand how federal vs state laws work in regards to federally regulated businesses
ITT: plenty of people who don't remember 2007 or 2020. Financial forms obey the rules that they want to when they want to. The federal government works for them, not the other way around.
This has nothing to do with the law this is MasterCard deciding to not go after that market.
Here in Canada we were instructed to never use credit card to buy cannabis because we would risk be denied entry in the US.
Which is why in a lot of dispos across the country youll get change back after using your card.
It's not MasterCard's fault, it's the federal regulations against marijuana that make it illegal for MasterCard to process these payments. Blame the federal government, specifically the DEA who've become their own legislators and enforcers (they've usurped the original checks and balances of the Controlled Substances Act, it's pretty fucked up actually).
Bottom line: War on drugs has been a catastrophic failure of epic proportions and yet we haven't gutted and dismantled the sole agency that's gotten fat off of it and operates with barely any oversight.
Oh don't get me wrong, they're an evil company like the rest of their ilk. I was just clarifying that in this specific context, they're not the ones at fault for once.